This week, President Biden signed the Speak Out Act into law, the most recent victory for advocates against workplace sexual assault and sexual harassment. The Speak Out Act makes prior non-disclosure and non-disparagement clauses in agreements (or “NDAs”) unenforceable when the parties later become engaged in a dispute regarding sexual assault or sexual harassment.
The first substantive section of the Speak Out Act lays out a series of findings regarding sexual assault and sexual harassment that paint a clear picture of the need for the law. As stated by the Act, “eighty-one percent of women and forty-three percent of men have experienced some form of sexual assault or harassment throughout their lifetime,” and “one in three women has faced sexual harassment in the workplace during her career.” Despite these staggering statistics, “an estimated 87 to 94 percent of those who experience sexual harassment never file a formal complaint.”
A group of lawmakers stated that “1 in 3 workers is subjected to NDAs that hide sexual misconduct in order to protect a business’s reputation.” Until now, some of those workers have been bound by prior NDAs that prevent them from speaking out about experiences of sexual assault or sexual harassment. As the Act lays out, these provisions “can perpetuate illegal conduct by silencing those who are survivors of illegal sexual harassment and assault or illegal retaliation, or have knowledge of such conduct, while shielding perpetrators and enabling them to continue their abuse.”
In short, employers have been able to keep survivors silent about their abuse and about their abuser, leaving the abuser without any external check on their actions. As lawmakers stated, the Speak Out Act is designed to “take the gag off.”
The Speak Out Act only applies to non-disclosure and non-disparagement clauses “agreed to before the dispute arises.” If someone with a pre-existing NDA then enters a dispute about sexual assault or sexual harassment, the NDA becomes unenforceable with regard to conduct (such as sexual assault) “alleged to violate Federal, Tribal, or State law.” Notably, the Act does not require that the NDA pre-date the sexual assault or sexual harassment itself; it must only pre-date the dispute. The Act does not prevent employers from including NDAs in agreements settling sexual assault or sexual harassment disputes with their employees, nor does it make those clauses unenforceable now in existing settlement agreements that followed a dispute.
Multiple states passed similar laws in recent years that make non-disclosure and non-disparagement clauses unenforceable in their states under qualifying circumstances. Those laws are broader than the Speak Out Act: Washington’s state law makes NDAs unenforceable when they arise from or apply to “conduct, that the employee reasonably believed … law to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy;” New Jersey’s makes NDAs concealing “discrimination, retaliation, and harassment” generally unenforceable against the employer only, except in certain circumstances; and California’s applies to NDAs that prevent the employee from discussing “information about unlawful acts in the workplace,” including, but not limited to, sexual harassment. New Jersey’s and Washington’s statutes go one step further, making non-disclosure and non-disparagement clauses related to applicable actions even in settlement agreements unenforceable. The Speak Out Act is a federal law, and its protections apply nationwide.
The Speak Out Act is the latest in a long line of reforms that gained momentum during the #MeToo movement that began five years ago. Although most of the legislative reforms have occurred at the state level, there have also been meaningful federal reforms. In 2017, Congress made settlement payments and attorney’s fees related to sexual harassment disputes non-tax deductible if the payment is subject to an NDA. Earlier this year the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act went into effect at the federal level. Similar to the Speak Out Act, that act ensures that survivors are not bound by prior agreements when it comes to addressing sexual harassment—in this case, prior agreements to resolve any disputes by arbitration, a non-judicial resolution process.
The Speak Out Act is an important step in ensuring that abusers and harassers are held accountable, and that survivors can speak freely about their experiences of sexual assault and sexual harassment.
If you have been subjected to sexual assault or sexual harassment in the workplace, or have questions about an employment agreement you’ve signed, contact our employment attorneys at (617) 742-6020.