Speak Out Act Curbs Confidentiality Agreements for Sexual Harassment and Sexual Assault

US President Joseph Biden signed the Speak Out Act into law on December 7, following its passage by wide margins in Congress. The act makes certain nondisclosure and nondisparagement agreements unenforceable when they relate to sexual assault or sexual harassment disputes.

The Speak Out Act was designed to address issues identified in the #MeToo movement around the use of nondisclosure and nondisparagement agreements in sexual assault and sexual harassment cases. The act seeks to ensure that victims and survivors have the freedom to report and publicly disclose sexual abuse, hold perpetrators of sexual harassment and sexual assault accountable, and promote safer and productive workplaces. It is a companion measure to the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which was signed into law in March 2022.

The act provides that nondisclosure and nondisparagement clauses in any agreement or contract are judicially unenforceable with respect to a sexual assault or sexual harassment dispute that arises after the agreement is signed.

The act’s definitions of “nondisclosure” and “nondisparagement” agreements are fairly broad. Any agreement or clause in an agreement that requires parties “not to disclose or discuss conduct, the existence of a settlement involving conduct, or information” related to the contract qualifies as a covered “nondisclosure clause.” Any agreement or clause that requires one of more parties to “not make a negative statement about another party that related to the contract, agreement, or case” is a covered “nondisparagement clause.”

Importantly, the act does not prohibit the use of these clauses. Instead, it makes them judicially unenforceable with respect to disputes involving sexual harassment and sexual assault. The terms “sexual assault dispute” and “sexual harassment dispute” are defined as disputes involving nonconsensual sexual acts or contact or conduct that is alleged to constitute sexual harassment as those terms are defined under applicable federal, tribal, or state law.

The act will “apply with respect to a claim that is filed under Federal, State, or Tribal law on or after [December 7, 2022].” The act explicitly provides that nothing in it prohibits states or localities from enacting more protective laws related to nondisclosure or nondisparagement clauses or bars employers from protecting trade secrets or proprietary information.

Implications for Employers

Does Not Prohibit the Use of Nondisclosure and Nondisparagement Agreements

As discussed above, the act does not prohibit employers from using nondisparagement or nondisclosure agreements, including as a general condition of employment, nor does it require that employers include certain language in those agreements. While employers may consider amending their agreements to reflect the limits created by the act, they are not required to do so. Furthermore, the act does not place any limitations on confidentiality agreements reached in the settlement of sexual harassment and sexual assault claims.

Application to Agreements Made Before Enactment Is Unclear

It is not clear whether the act applies to agreements made prior to December 7, 2022. Similar questions have arisen under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act and at least two courts have held that prior agreements are not covered by the law. We expect this will also be a subject of litigation under the Speak Out Act.

Applicable to Employees and Consumers

The act applies to any agreement between one or more parties. That includes agreements between employers and current, former, and prospective employees and independent contractors. The act also extends to agreements between providers of goods and services and their customers.

Next Steps

Employers should evaluate their policies and practices in light of the law, including their procedures for responding to employee or customer complaints of sexual harassment and sexual assault.

The act underscores the importance of effective sexual harassment prevention training and protocols. Employers should focus their efforts on addressing and correcting the behaviors that can lead to sexual harassment claims in the first instance.

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