Texas restricts non-disclosure provisions in settlement agreements

At a glance

• A new law impacts non-disclosure and confidentiality provisions that prohibit a person from disclosing an act of sexual abuse or facts related to sexual abuse of another person.
• Such provisions, including those in employment and settlement agreements, will be void and unenforceable. 
• The new law is effective September 1, 2025. 

Effective September 1, 2025, Texas Senate Bill 835 makes non-disclosure and confidentiality provisions of any agreement, including employment and settlement agreements, void and unenforceable to the extent the agreement prohibits a person from disclosing an act of sexual abuse or facts related to sexual abuse of another person as defined by the statute.

While non-disclosure and confidentiality provisions cannot encompass sexual abuse, the law clarifies that parties can continue to agree to keep confidential any other provision of a settlement agreement, including the amount of payment and other terms of settlement.

Unless a party seeks a declaratory judgment and is granted a court order permitting non-disclosure of the sexual abuse, this prohibition applies retroactively to all agreements entered into before the effective date.

While it may not be necessary to revise confidentiality and non-disclosure provisions to specifically reference the new law, employers are encouraged to review agreements to ensure they at least contain general 'savings' language that says they do not apply if otherwise prohibited by law.