On December 7, 2022, President Biden signed the “Speak Out Act” which limits employers’ ability to prevent employees from speaking out about allegations of sexual assault and/or sexual harassment before such a dispute arises. The Act renders non-disclosure and non-disparagement clauses unenforceable if such prohibitions are included. Notably, this Act does not prohibit parties from agreeing to these provisions after a claim or dispute has arisen and therefore, they can be included as part of a settlement agreement.
Under the Speak Out Act:
- A non-disclosure clause requires a party not to “disclose or discuss conduct, the existence of a settlement involving conduct, or information covered by the terms and conditions of the contract or agreement.”
- A non-disparagement clause is defined as “a provision in a contract or agreement that requires 1 or more parties to the contract or agreement not to make a negative statement about another party that relates to the contract, agreement, claim, or case.”
This new law is consistent with other recent federal, state, and local laws that seek to curb limitations employers can place on an employee’s ability to come forward publicly to address or seek redress for workplace misconduct, such as the recently enacted Federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (which is an amendment to the Federal Arbitration Act). That law prohibits the enforcement of pre-dispute agreements that require arbitration of sexual harassment and sexual assault claims. Notably, the Speak Out Act does not preempt state laws (such as those in California, Illinois, and Washington) which may have even broader protections for employees’ abilities to talk about and disclose information regarding sexual harassment, sexual assault and/or other types of claims.
Employers should carefully review non-disclosure and non-disparagement provisions in their template agreements (such as NDAs, employment agreements, etc.) with their employment lawyer to determine whether revisions need to be made to be compliant with this new law.