The federal “Speak Out Act” limiting the enforceability of pre–dispute, non-disclosure and non-disparagement clauses covering sexual assault and sexual harassment disputes has been signed into law. The Act takes effect immediately.
The Speak Out Act places restrictions on the enforceability of pre-dispute, non-disclosure clauses and non-disparagement clauses and piggy backs on the recent Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act which prohibits arbitration clauses for adjudication of sexual harassment claims.
Such clauses entered into before a sexual assault or sexual harassment dispute arises are rendered unenforceable. The Act defines covered “sexual assault disputes” as disputes “involving a nonconsensual sexual act or sexual contact, as such terms are defined in section 2246 of title 18, United States Code, or similar applicable Tribal or State law, including when the victim lacks capacity to consent.” Covered “sexual harassment disputes” are defined as disputes “relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.”
Importantly, the Act only applies to non-disclosure and non-disparagement clauses in pre-dispute agreements. Therefore, any non-disclosure/non-disparagement clauses in agreements entered into by employers/employees concerning sexual assault or sexual harassment issues after a dispute has arisen are not impacted by the Act. As a result, the Act’s protections would not apply to non-disclosure/non-disparagement clauses in separation or settlement agreements executed after sexual harassment or sexual assault allegations are made, but may be subject, of course, to any applicable state or local laws.
The Act excludes from coverage any efforts by employers to protect trade secrets and proprietary information via non-disclosure or non-disparagement provisions.
Employers using non-disclosure/non-disparagement agreements as part of their hiring process will want to create new arrangements for sexual assault and sexual harassment issues given the new Act.
Employers should also be aware of other recent developments in this area. The Speak Out Act also follows the enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which took effect earlier this year. That federal law prohibits employers from compelling arbitration of sexual harassment or sexual assault claims and provides employees the option to pursue those claims in other forums. California, Illinois, New Jersey, and New York have enacted laws in recent years that grant employees broader protections when it comes to certain sexual harassment and discrimination claims, enhancing employees’ abilities to speak out about alleged misconduct.
If you have questions about how the new Act may impact your organization, please contact Christopher J. Carlos or Caroline K. Vickrey.
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