By: Cristina N. Hyde, JD
With the recent enactment of the Speak Out Act, (Pub.L. 117-224) all employers should be aware that the use of nondisclosure or nondisparagement agreements (NDAs) to silence the victims of workplace sexual harassment and sexual assault has been limited. Drafted to combat inappropriate conduct in the workplace, the Speak Out Act prohibits the judicial enforceability of pre-dispute NDAs.
Findings underpinning the new law state that eighty-one percent of women and forty-three percent of men have experienced some form of harassment in their lifetime. Statistics also suggest that an estimated eighty-seven to ninety-four percent of victims never file a formal complaint. Therefore, acknowledging a need to support those willing to disclose abuse, the Speak Out Act states:
With respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated Federal, Tribal, or State law. Ibid. §4(a).
Supporters of the law, including its sponsor, U.S. Senator Kirsten Gillibrand, believe that this legislation is a step towards fixing a broken system that protects perpetrators, while silencing victims and often forcing survivors out of the workplace and preventing opportunities for advancement. Instead, the Act is meant to empower survivors to speak out without fear of legal retaliation; encouraging transparency that will make for a safer and more productive workplace.
Of course, the Speak Out Act does contain exceptions including a specific clarification that it does not prohibit an employer from protecting trade secrets and proprietary information. In addition, the new law is not applicable to the use of NDAs in connection with the settlement of claims or disputes relating to sexual assault or harassment.
The Speak Out Act is also meant to set a threshold upon which state governments are permitted to build. Therefore, states are free to enact additional protections restricting NDA enforceability and some states, like New Jersey, are already in the process of doing so (our post on A4521, can be found here).
The Act is applicable to all claims filed on or after December 7, 2022. Therefore, employers should review existing nondisclosure and nondisparagement agreements for enforceability and be conscious of the new parameters set by the Speak Out Act when drafting new employment agreements.
If you have any questions on how the Speak Out Act will affect your business or would like help updating your policies, employee handbooks, or employment contracts, Campanella Law Office can help.