January 31st, 2023
President Joe Biden signed the Speak Out Now Act into law on December 7, 2022. The Act comes as an offshoot of the #MeToo movement and was spearheaded by the #MeToo movement’s leaders Gretchen Carlson and Julie Roginsky. As part of its reasoning for passing the Speak Out Now Act, Congress found that “81% of women and 43[%] . . . of men have experienced some form of sexual harassment or assault.” S.4524(2)(2). Additionally, “[o]ne in three women has faced sexual harassment in the workplace during her career, and an estimated 87% to 94% of those who experience sexual harassment never file a formal complaint.” Id. The Speak Out Now Act comes on the heels of the Ending of Forced Arbitration of Sexual Assault and Sexual Harassment Act, which prohibits mandatory arbitration for sexual harassment and sexual assault disputes. President Biden signed that measure into law on March 3, 2022.
Speak Out Now Act
The Speak Out Now Act explicitly bans all nondisclosure clauses and non-disparagement clauses regarding a sexual assault or sexual harassment dispute that is “agreed to before the dispute arises . . . in which conduct is alleged to have violated Federal, Tribal, or State law.” S.4542(4)(a). This means that as of December 7, 2022, all nondisclosure clauses and non-disparagement clauses regarding sexual harassment or sexual assault disputes under federal, tribal, or state law which are part of an agreement entered into before the dispute occurs are unenforceable. Id. This prohibition applies to all agreements, regardless of when they were executed, as long as the sexual assault dispute or sexual harassment dispute was brought under federal, tribal, or state law on or after December 7, 2022. S.4542(5).
The Speak Out Now Act also accounts for state laws which may provide further protections for individuals who signed agreements that included a nondisclosure clause or a non-disparagement clause regarding sexual assault and sexual harassment disputes before those disputes arose. Specifically, the Act says that “[n]othing in this Act shall prohibit a State or locality from enforcing a provision of State law governing nondisclosure on non-disparagement clauses that is at least as protective of the right of an individual to speak freely, as provided by this Act.” S.4542(4)(b). The Act also does not “supersede a provision of Federal, State, or Tribal Law that governs the use of pseudonyms in the filing of claims involving sexual assault or sexual harassment disputes.” S.4542(4)(c). This means that potential victims who file claims alleging sexual harassment or sexual assault may continue to file under pseudonyms to the extent permitted by law.
The Speak Out Now Act also ensures protections for employers with regard to trade secrets and confidential information. Specifically, the Speak Out Now Act explicitly states that “[n]othing in this Act shall prohibit an employer and an employee from protecting trade secrets or proprietary information.” S.4542(4)(d). Further, the Act only applies to a sexual assault dispute or a sexual harassment dispute. The Act defines a sexual assault dispute as “a dispute involving a non-consensual sexual act or sexual contact, as such terms are defined in section 2246 of title 18, United States Code, or similar applicable Tribal or State law, including when the victim lacks capacity to consent.” S.4542(3)(3). The Act defines a sexual harassment dispute as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” S.4542(3)(4).
What Employers Should Expect
Overall, the Speak Out Now Act makes modest changes to the current employment law landscape. The only activity that the Speak Out Now Act prohibits is entering into an agreement that contains a nondisclosure clause and/or non-disparagement clause regarding a sexual assault dispute or a sexual harassment dispute raised under federal, tribal, or state law prior to the dispute arising. The Speak Out Now Act does not appear to prohibit nondisclosure clauses or non-disparagement clauses that are part of a settlement agreement, or any other agreement, after a sexual harassment or sexual assault dispute arises. However, employers should keep in mind what state law prohibitions may exist and ensure that these settlement agreements also comply with applicable state law. Further, the Speak Out Now Act does not prohibit the use of nondisclosure clauses and non-disparagement clauses regarding other subject matters. For example, a nondisclosure clause pertaining to trade secrets or confidential proprietary information would still be enforceable in the context of the Speak Out Now Act.
Although the Act makes minimal changes to employment law, employers should review their agreements, including all non-disparagement and nondisclosure agreements, to verify whether they violate the Speak Out Now Act. Although most agreements contain a severability provision that aims to protect the parties to the agreement by making each clause severable in the event that a clause is voided, it may be best practice to eliminate the unenforceable clause going forward. Additionally, employers may wish to revise these agreements altogether and have employees re-execute them subject to each agreement’s modification clause.
Employers should be aware of states that have implemented their own version of the Speak Out Now Act because those states’ laws could provide even more protections for potential victims of sexual assault or sexual harassment. For example, in California it is unlawful:
for an employer, in exchange for a raise or bonus, or as a condition of employment
or continued employment, . . . [to require] an employee to sign a non-disparagement
agreement or other document to the extent that it has the purpose or effect of
denying the employee the right to disclose information about unlawful acts in the
Cal. Gov. Code § 12964.5(a)(1)(B)(i) (2022). The term “unlawful acts” likely extends to conduct beyond sexual assault disputes and sexual harassment disputes. Additionally, California requires that all employers put specific language in employment agreements that contemplate non-disparagement clauses, nondisclosure clauses, or similar clauses. Id. at § 12964.5(a)(1)(B)(ii) (2022). This language explains what an employee’s rights are with regard to discussing unlawful conduct at the workplace. Employers may consider putting similar language in their agreements that contain non-disparagement clauses and nondisclosure clauses that explicitly state that claims regarding sexual assault disputes or sexual harassment disputes that have yet to arise are excluded from such clauses.
Employers should also be aware that similar legislation could be debated and passed by Congress and signed into law by President Biden. The Biden Administration has expressed a dislike for arbitration agreements in general and a willingness to expand the list of subject matter that is banned from mandatory arbitration. Lisa Nagele-Piazza, President Signs Bill Banning Mandatory Arbitration for Certain Claims, SHRM (Mar. 3, 2022). This aversion to arbitration agreements could extend to non-disparagement clauses and nondisclosure clauses as well, thus suggesting more issues and topics might be excluded from non-disparagement clauses and nondisclosure clauses.
As of now, all nondisclosure clauses and non-disparagement clauses that contemplate a sexual assault dispute or sexual harassment dispute under federal, state, or tribal law, where that dispute has yet to arise, are unenforceable. Employers should review their agreements for nondisclosure clauses and non-disparagement clauses that pertain to sexual harassment disputes or sexual assault disputes prior to the disputes arising and modify them according to the Speak Out Now Act. Employers should also verify that there are no state laws that have even greater restrictions for nondisclosure clauses and non-disparagement clauses.
Meredith J. Maroney
Rainey, Kizer, Reviere, & Bell PLC