On Dec. 7, 2022, President Joe Biden signed into law the Speak Out Act. The new law renders unenforceable any predispute nondisparagement clause or nondisclosure agreement relating to sexual assault or sexual harassment. A little over five years after the #MeToo movement, the Speak Out Act passed unanimously in the Senate and with a 315-109 vote in the House.
What does the Speak Out Act do?
The new law prohibits enforcement of nondisclosure and nondisparagement clauses relating to a “sexual assault dispute” or “sexual harassment dispute” if the agreement was entered before the dispute arose. “Sexual assault” and “sexual harassment” are defined by deference to relevant federal and state laws.
Importantly, the Speak Out Act affects only predispute agreements. Accordingly, the law will apply to blanket nondisclosure agreements, for example, that were entered at the start of employment. However, courts can continue to enforce nondisclosure agreements and nondisparagement agreements entered to settle a claim of sexual assault or sexual harassment. The legislative history of the bill suggests that a lawsuit does not need to be filed in order to qualify as a dispute falling outside the scope of the new law.
Notably, the Speak Out Act does not void any agreements containing such nondisclosure or nondisparagement clauses or impose any penalty for the inclusion of such clauses in agreements. Rather, it merely bars the enforcement of such provisions. However, it is important to remember that states or localities may enact laws governing nondisclosure and nondisparagement clauses even more protective of an individual’s right to speak freely.
What does this mean for employers?
Employers should review their agreements with employees — particularly employment agreements, confidentiality agreements and separation agreements — as well as their employee handbooks and other policies to ensure compliance with the new law. Some employers may consider expressly permitting disclosures protected by law, including the Speak Out Act.
Employers also should be mindful of state law requirements regarding nondisclosure and nondisparagement clauses. To date, Arizona, California, Hawaii (with 2022 amendments), Illinois, Maine, Maryland, Nevada, New Jersey, New Mexico, New York (laws can be found here and here), Oregon, Tennessee, Vermont, Virginia and Washington have laws regarding such provisions that vary in scope.
For questions about the Speak Out Act, or any aspect of labor and employment law, please contact the authors of this article or any member of the firm’s labor and employment team.