Congress Passes the Speak Out Act
[UPDATE: On December 7, 2022, President Biden signed the Speak Out Act (the “Act”) into law. This bipartisan legislation, passed by the U.S. Senate on September 29, 2022 and by the House of Representatives on November 16, 2022, limits the enforceability of pre–dispute nondisclosure and nondisparagement clauses relating to sexual assault and sexual harassment claims.]
On November 16, 2022, the U.S. House of Representatives passed the Speak Out Act (the “Act”), which President Biden is expected to sign into law. The bipartisan legislation, passed by the Senate on September 29, 2022, limits the enforceability of pre–dispute nondisclosure and nondisparagement clauses relating to sexual assault and sexual harassment claims.
For purposes of the Act:
a nondisclosure clause means “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 a settlement involving conduct, or information covered by the terms and conditions of the contract or agreement”; and
a nondisparagement clause means “a provision in a contract or agreement that requires 1 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.”
The Act includes a carveout for protecting trade secrets and proprietary information—the basis for many pre-dispute nondisclosure and nondisparagement clauses in employment agreements.
Importantly, the Act applies only to nondisclosure and nondisparagement clauses in agreements entered before a sexual assault or sexual harassment dispute has arisen. Given this limitation, the Act would not apply to separation and settlements agreements resolving claims an employee has already raised. However, employers may want to consider adding an exemption in standard release agreements containing nondisparagement and nondisclosure provisions for sexual harassment and sexual assault claims that have not previously been raised.
The Act covers agreements signed prior to its effective date, but would only apply to claims arising after its effective date.
While the Act’s scope appears to be limited, employers who include nondisparagement and nondisclosure provisions in employment agreements, confidentiality agreements, and general separation or settlement agreements should carefully review such documents to determine if the clauses are needed and whether any sexual harassment and sexual assault claims should be explicitly excluded. More than a dozen states have enacted similar laws, and some, such as the Silenced No More Acts in both Washington and California, limit nondisclosure and nondisparagement provisions more broadly than the Act. Therefore, employers should also ensure their agreements also comply with applicable state law.
Of note, the Act comes on the heels of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, signed into law on March 3, 2022, as the second major piece of employment legislation addressing workplace sexual assault and harassment passed by this Congress. As we previously reported, that law amended the Federal Arbitration Act (FAA) to make pre-dispute arbitration agreements for sexual assault and sexual harassment claims invalid and unenforceable.