On December 7, 2022, President Biden signed into law the much-heralded “Speak Out Act.” As the name suggests, the Act is designed to “empower survivors [of sexual harassment and sexual assault] to come forward” and “hold perpetrators accountable for abuse” while improving the safety and productivity of the workplace. The Act notes that “nondisclosure and nondisparagement 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.” Supporting the need for the law, Congress noted that “[e]ighty-one percent of women and 43 percent of men have experienced some form of sexual harassment or assault.”

The Act prohibits employers from enforcing pre-dispute non-disclosure or non-disparagement agreements to prevent employees from speaking freely about sexual harassment or sexual assault claims. The law takes effect immediately and applies to any claim of sexual harassment or sexual assault that is filed on or after December 7, 2022.

Employers who routinely ask employees to sign confidentiality agreements should note the following key terms defined in the Act:

  1. A “nondisclosure clause” is a “provision in a contract or agreement that requires the parties to the contract or agreement not to disclose or discuss conduct, the existence of settlement involving conduct, or information covered by the terms and conditions of the contract or agreement.”
  2. A “nondisparagement clause” is a “provision in a contract or agreement that requires [one] or more parties to the contract or agreement not to make a negative statement about another party that relates to the contract, agreement, claim, or case.”
  3. A “sexual assault dispute” is a “dispute involving a nonconsensual sexual act or sexual contact, as such terms are defined” under federal, tribal, or state law.
  4. A “sexual harassment dispute” relates to “conduct that is alleged to constitute sexual harassment” under federal, tribal or state law.

Agreements that contain nondisclosure clauses or nondisparagement clauses as defined in the Act cannot be used going forward to silence employees with respect to claims of sexual harassment or sexual assault as defined above.

The Speak Up Act provides for certain exceptions. Most important, the Act does not prohibit nondisclosure or non-disparagement agreements in settlement or separation agreements executed after allegations of sexual assault or sexual harassment have arisen. In addition, it does not prohibit the protection of company trade secrets or proprietary information. Finally, the law does not prohibit federal, state or local law that regulates nondisclosure and non-disparagement clauses so long as the law is as protective or more protective than the Speak Out Act, and it does not preempt or supersede current federal, state, or local law that allows for the use of pseudonyms when filing claims alleging sexual misconduct.

Employers should review their current agreements and ensure they have included exceptions to nondisclosure and non-disparagement clauses as they relate to disputes surrounding sexual assault or sexual harassment. Moreover, some states have enacted nondisclosure or non-disparagement laws with higher thresholds of protection and broader applicability. Therefore, employers should conduct a review of their agreements against federal, state and local law to ensure compliance.