On November 16, 2022, Congress passed the Speak Out Act, which allows employees to report workplace sexual assault and harassment even if they signed a nondisclosure agreement. Following soon after the enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, this bill stems from the #MeToo Movement and is intended to encourage employees to report instances of abuse in the workplace.
What employers need to know:
- Employers can still enter into post-dispute confidentiality agreements. The Speak Out Act only applies to agreements entered into before a sexual harassment or sexual assault dispute arises, such as a non-disclosure or non-disparagement clause in an employment contract signed on the day of hiring and prior to alleged harassment taking place. The Act does not impact the enforceability of confidentiality provisions in settlement agreements voluntarily entered into after a dispute arises.
- The Speak Out Act applies only to sexual harassment and sexual assault disputes. This means that non-disclosure and non-disparagement agreements signed at the time of an employee’s hiring may be enforceable as applied to other types of employment disputes. Additionally, employers can still utilize confidentiality agreements to protect trade secrets and other sensitive proprietary information that employees may have access to on the job.
- Both non-disclosure and no disparagement agreements are covered. While non-disclosure and non-disparagement agreements have similar purposes and terms, they are slightly different, and Congress explicitly included both in the Speak Out Act. As defined by Congress, a non-disclosure clause is a provision in a contract that requires the parties of the contract not to disclose or discuss conduct, the existence of a settlement involving conduct, or information covered by the contract. Alternatively, a non-disparagement clause is broader, and is a provision in a contract that prohibits a party to a contract from making negative statements about the other party. Neither type of agreement signed prior to a dispute may be used under the Speak Out Act to silence an individual making a claim of workplace sexual assault or harassment.
The Speak Out Act will take effect immediately upon President Biden’s signature. Biden has expressed support for the Act and is expected to sign it into law soon. To ensure that your company’s confidentiality agreements protect sensitive information while complying with the Speak Out Act, reach out to a Critchfield attorney.