89R16176 KKR-D
By: Morales of Harris H.B. No. 5425
A BILL TO BE ENTITLED
AN ACT
relating to prohibiting certain nondisclosure or non-disparagement
agreements by employers; creating a civil cause of action.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 2, Labor Code, is amended by
adding Chapter 25 to read as follows:
CHAPTER 25. CERTAIN NONDISCLOSURE AND NON-DISPARAGEMENT
AGREEMENTS PROHIBITED
Sec. 25.001. DEFINITIONS. In this chapter:
(1) "Employee" means an individual who performs
services for an employer for compensation under an oral or written
contract of hire, whether express or implied.
(2) "Employer" has the meaning assigned by Section
61.001.
Sec. 25.002. EXEMPTIONS. This chapter does not prohibit:
(1) enforcement of a provision in any agreement that
prohibits the disclosure of the amount paid in a settlement
agreement; or
(2) an agreement that lawfully protects trade secrets,
proprietary information, or confidential information not subject
to this chapter.
Sec. 25.003. PROVISIONS OF CERTAIN AGREEMENTS VOID AND
UNENFORCEABLE. Any provision of a nondisclosure, confidentiality,
or non-disparagement agreement or any other agreement between an
employer and an individual who is an employee or independent
contractor is void and unenforceable as against the public policy
of this state if the provision prohibits the individual from
disclosing or discussing conduct that the individual reasonably
believes is a violation of state or federal law, including a
violation of law related to:
(1) wages;
(2) discrimination;
(3) harassment;
(4) retaliation; or
(5) sexual assault.
Sec. 25.004. PROHIBITED CONDUCT BY EMPLOYER. An employer
may not:
(1) discriminate or retaliate against an individual
because the individual:
(A) discloses or discusses conduct that the
individual reasonably believes is a violation of law described by
Section 25.003; or
(B) refuses to sign an agreement prohibited by
this chapter;
(2) request or require that an individual sign an
agreement prohibited by this chapter; or
(3) attempt to enforce a provision of an agreement
prohibited by this chapter, whether through a lawsuit, a threat to
enforce, or any other attempt to influence an individual to comply
with a provision in any agreement that is prohibited by this
chapter.
Sec. 25.005. CIVIL ACTION. (a) An individual aggrieved by
a violation of this chapter may bring a civil action against the
employer to enforce rights protected by this chapter.
(b) An individual who prevails in a civil action under this
section is entitled to recover from the employer:
(1) damages in an amount equal to the greater of:
(A) actual damages incurred; or
(B) $10,000; and
(2) reasonable attorney's fees and costs.
Sec. 25.006. LIBERAL CONSTRUCTION. This chapter shall be
liberally construed to effectuate its purposes.
SECTION 2. (a) Section 25.003, Labor Code, as added by this
Act, applies to an agreement entered before, on, or after the
effective date of this Act.
(b) Sections 25.004 and 25.005, Labor Code, as added by this
Act, apply only to a cause of action that accrues on or after the
effective date of this Act.
SECTION 3. This Act takes effect September 1, 2025.