Unenforceable provisions concerning Sexual Assault and Sexual Harassment
The Speak Out Act was signed into law on December 7, 2022.
The Act bars judicial enforcement of non-disclosure and non-disparagement clauses concerning sexual assault and sexual harassment allegations if entered into “before the dispute arises.” This ensures that “victims and survivors have the freedom to report and publicly disclose their abuse,” while still allowing employers to use nondisclosure and non-disparagement clauses in resolving a dispute once it has arisen.
The Speak Out Act defines nondisclosure and non-disparagement clauses broadly. Specifically, a nondisclosure clause covers any contract provision 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.” A non-disparagement clause is any contract provision “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.”
For purposes of the Speak Out Act, a “sexual assault dispute” includes any “dispute” involving a nonconsensual sexual act or sexual contact that violates applicable law. A “sexual harassment dispute” occurs once an allegation about conduct constituting sexual harassment under any applicable law is made. It is unclear whether “dispute” includes internal complaints of sexual assault or harassment where the employee has not filed an agency charge or lawsuit.
Under the new law, a severance or settlement agreement would still be enforceable, even if entered into before a “dispute.” However, blanket, preemptive nondisclosure and non-disparagement provisions commonly included in many types of agreements between employers and employees would be unenforceable under the Speak Out Act concerning claims of sexual assault and harassment. These blanket, preemptive nondisclosure and non-disparagement clauses may be found in:
Confidentiality or restrictive covenant agreements;
Employment agreements;
Separation agreements providing for the payment of severance upon termination where no claim of sexual assault or harassment has been asserted;
Settlement agreements that do not resolve claims of sexual assault or harassment; and
Confidentiality policies in employee handbooks or policy manuals.
The Speak Out Act is not retroactive, meaning that, while it covers agreements signed before December 7, 2022, it only applies to claims (presumably by employers to enforce a prohibited nondisclosure or non-disparagement provision) filed after that date.