The Speak Out Act (the Act) was signed into law by President Biden on December 7, 2022, and was effective immediately, and is not retroactive for agreements entered into prior to the date it was enacted. The Act prohibits the use of nondisclosure agreements (NDAs) and non-disparagement clauses to keep sexual harassment and assault victims silent. The Act allows employees and victims to speak out publicly about acts of abuse. Congress stated the purpose of the Act is to “empower survivors to come forward, hold perpetrators accountable for abuse, improve transparency around illegal conduct, enable the pursuit of justice, and make workplaces safer and more productive for everyone.” At the time the Act was signed, it is estimated that 1 in 3 workers is subjected to NDAs that protect sexual misconduct in order to protect a business’s reputation.
The Speak Out Act applies to agreements entered into before a dispute arises related to allegations of sexual harassment and/or sexual assault. Employers may not prevent or limit an employee from discussing allegations related to sexual harassment or assault when the employee signed an NDA prior to the allegations. The Act does not stop employers and employees from entering into settlement agreements that include NDAs related to sexual harassment lawsuits, provided that employers cannot preclude employees from reporting violations of EEO laws to agencies, such as the EEOC. The Act does not apply to other workplace misconduct such as discrimination related to age, race, gender, national origin, and similar equal employment opportunity claims. Employers may still require employees to sign NDAs to protect trade secrets and confidential business information and may still include confidentiality provisions in severance agreements.
The Speak Out Act follows President Biden’s recent passage of the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” or the #MeToo Bill, in March of 2022 that bans mandatory arbitration for workplace sexual harassment and assault making it easier for employees and victims to pursue lawsuits in court. California, Illinois, New Jersey, and New York have already passed laws similar to the Speak Out Act.
Employers should review their employee handbooks, offer letters, agreements (such as employment, separation, and independent contractor agreements), and policies that may contain nondisclosure and/or non-disparagement agreements to make sure they are compliant with the Speak Out Act, as well as the #MeToo Bill.