No doubt influenced by highly publicized and often disturbing cases of sexual harassment and assault that have been featured in the media, Congress passed the Speak Out Act (the Act), effective as of December 7, 2022. As had been noted in many instances — and in the “findings” in the Act, serial abusers are often free to repeat their offences because of confidentiality and non-disparagement clauses contained in non-disclosure agreements that prevent the settling victims from speaking out publicly about their abusers. The Act was passed to remove these restrictions in some cases.
Sexual Harassment and Assault Claims Are Pervasive
Among the other findings contained in the Act are that:
- “Eighty-one percent of women and 43 percent of men have experienced some form of sexual harassment or assault throughout their lifetime;
- Sexual harassment in the workplace forces many women to leave their occupation or industry, or pass up opportunities for advancement; and
- To combat sexual harassment and assault, it is essential that victims and survivors have the freedom to report and publicly disclose their abuse.”
This new law prohibits judicial enforcement of nondisclosure and non-disparagement clauses solely with respect to either a “sexual harassment dispute” or a “sexual assault dispute” provided that the agreement that contains these provisions was entered into prior to when the dispute arose. It applies to any “claim” filed on or the effective date of the law.
The Act Applies Only to Some Non-disclosure and Non-disparagement Clauses
The Act states that a nondisclosure clause or a non-disparagement clause is unenforceable under with respect to a sexual harassment or sexual assault dispute under applicable federal, state or tribal law if the clause:
- was entered into prior to the time an applicable dispute arose;
- “requires the parties not to disclose or discuss the conduct, a settlement involving the conduct, or information covered by the terms and conditions of the contract or agreement”; or
- Requires any party to the contract “not to make a negative statement about another party that relates to the contract, agreement, claim, or case.”
The Act does not state what contracts are affected by the new law, but these clauses are often found in ones where an employee is applying for or accepting a new job. However, the Act’s findings noted that these provisions are contained in contracts with “current, former, and prospective employees, and independent contractors.” The Act does not apply to any agreements containing these provisions entered after the allegedly offending conduct occurs, such as employment separation agreements or settlement agreements. Nor does the Act apply to any other kind of conduct.
Not only is the Act inapplicable to nondisclosure and non-disparagement clauses contained in separation or settlement agreements entered into after an otherwise covered dispute arises but it also expressly excludes application to confidentiality agreements with respect to “trade secrets” or other “proprietary information.” Moreover, the Act does not preempt state laws that contain provisions that contain greater protections than those included in the Act with respect to such clauses, such as the those contained in New York’s General Obligations Law §5-336 (non-disclosure agreements) or Human Rights Law (Executive Law) §296 (unlawful discriminatory practices).
Other Recent Federal Legislation to Aid Sexual Harassment and Assault Victims
The Act is not the only federal law recently passed to help end the silencing victims of sexual harassment or assault. Many employment and independent contractor agreements also include broad mandatory arbitration provisions, which typically include assault and harassment claims. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act was enacted as of March 3, 2022. Similar to the Act, this law prohibits enforcement of arbitration clauses with respect to sexual assault and sexual harassment claims where those provisions are contained in agreements entered into prior to the time a sexual harassment or sexual assault dispute arises. This new law applies to claims arising on or after the effective date of the statute.
Seek Guidance Regarding Employment Contracts and Settlement Agreements
Both employers and employees should consult with an attorney experienced in employment law to consider the applicability of these new federal laws prior to their current and future agreements, including whether any existing agreements may need to be updated. Romano law attorneys are ready to help. Contact us to speak with a member of our team.
