On December 7, 2022, President Biden signed the “Speak Out Act,” which makes non-disclosure or non-disparagement agreements signed before a dispute arose unenforceable in certain contexts with respect to claims of sexual assault or sexual harassment. The Speak Out Act received unanimous support in the Senate, and bipartisan support in the House of Representatives. In a press briefing the White House explained, “The Speak Out Act creates a critical national standard, empowering survivors by prohibiting the enforcement of pre-dispute nondisclosure agreements—those are NDAs—and non-disparagement clauses in cases of workplace sexual assault or harassment.”
Our memorandum on related legislation that prohibits mandatory arbitration of sexual assault and sexual harassment claims, which was passed earlier this year, is available here.
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In the context of a “sexual assault dispute” or “sexual harassment dispute,” the Speak Out Act prohibits judicial enforcement of any “non-disclosure or non-disparagement clause agreed to before the dispute arises,” so long as the conduct “is alleged to have violated Federal, Tribal, or State law.” Significantly, the Act does not apply to non-disclosure or non-disparagement agreements entered into after a dispute has arisen, for example, in the context of post-dispute separation or settlement agreements. Moreover, nothing in the act “prohibit[s] an employer and an employee from protecting trade secrets or proprietary information.” The Act does not provide for other penalties beyond non-enforcement.
Under the law, a “non-disclosure clause” is broadly defined as “a provision in a contract or agreement that requires the parties to the contract or agreement 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 “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.”
Although the Act applies to pre-existing agreements, the Act only applies to claims arising after its effective date of December 7, 2022.
While the scope of the Speak Out Act is limited, employers should consider whether to exclude sexual harassment and sexual assault claims from confidentiality, non-disparagement, and non-disclosure provisions of employment agreements. In doing so, employers should be mindful that certain states have enacted prohibitions that are broader than the Speak Out Act. The Act does not affect such state law statutes to the extent they are “at least as protective of the right of an individual to speak freely.” Our memoranda discussing related laws in California and New York are available here and here.