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On December 7, 2022, President Biden signed into law the Speak Out Act (“the Act”). The Act provides, “With respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated Federal, Tribal, or State law.” 42 U.S.C. § 19403(a) (emphasis added). This means that parties are limited in being able to agree to not discuss a matter involving sexual assault or sexual harassment before the “dispute arises.” This phrase is not defined in the statute, but Congress made it clear that “[i]n order to combat sexual harassment and assault, it is essential that victims and survivors have the freedom to report and publicly disclose their abuse.” 42 U.S.C. § 19401. According to Congress, “[p]rohibiting nondisclosure and nondisparagement clauses will 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.” Id. The Act follows the enactment earlier in 2022 of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (as covered in our April 2022 blog). These acts are part of a larger movement across the country to limit the use of non-disparagement and non-disclosure provisions in agreements stemming from cases involving sexual harassment and sexual assault.

In response to the Act and the Ending Forced Arbitration Act, employers should review employment agreements, confidentiality agreements, employee handbooks, and arbitration agreements to ensure compliance. Furthermore, employers should review separation agreements and settlements to confirm they comply with this (and similar) legislation. Given the lack of a definition for when a “dispute arises,” one unintended consequence of the Act may be that employers will ask plaintiff’s counsel to file suit (with as few facts alleged as possible) before resolving a matter so enforceable confidentiality and non-disparagement provisions can be included in the settlement agreement. Furthermore, employers may include severability clauses (meaning that provisions can be removed if deemed unenforceable but keep the remainder of the agreement enforceable) in an attempt to make it seem that otherwise unenforceable non-disclosure and non-disparagement clauses are enforceable. It will be interesting to see how this legislation impacts sexual assault and sexual harassment matters going forward.

We will continue to monitor the situation and provide updates as they become available. If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

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