A new Federal law recently passed targeting non-disclosure and non-disparagement clauses in the employment context. The 2022 Speak Out Act prohibits U.S. employers from using these kinds of provisions to prevent employees from disclosing or discussing disputes involving workplace sexual harassment and assault. However, the new law only applies to agreements and/or contracts entered before such a dispute arises, meaning it does not directly bar non-disparagement or non-disclosure provisions in settlement agreements for claims involving sexual assault, harassment or retaliation claims.
The Speak Out Act is the second piece of Federal legislation passed in 2022 targeting workplace sexual harassment and assault. On March 4, 2022, President Biden signed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act”, which prohibits employers from using arbitration clauses or agreements to force employees into private arbitration of sexual harassment and assault claims.
The Speak Out Act continues expanding worker protections when it comes to sexual assault and harassment claims. The Act does not explicitly require the inclusion of any notice language informing employees of their right to disclose and discuss sexual harassment and assault disputes or conduct. Instead, Congress made it so non-disparagement and/or non-disclosure provisions are simply not enforceable when it comes to sexual assault or sexual harassment disputes “in which conduct is alleged to have violated Federal, Tribal, or State law”.
Finally, Congress specifically included that the Speak Out Act does not prohibit or limit employers from protecting their trade secrets and confidential information through non-disclosure agreements or provisions. This carve-out is important, as most employment “non-disclosure” agreements or clauses focus on protecting trade secrets and confidential information.
Some states, including Virginia, already have similar laws in place. A few other states, such as California and Washington, have enacted laws that go much further than the new Federal law. These state laws may require specific notice or exemption language in employment-related agreements or even some employment policies. The new Federal law does not preempt or override these state laws that go even further, meaning those additional state law requirements are still valid and apply to employers and employees in those states.
Employers should still review their employment-related agreements to make sure any non-disclosure and/or non-disparagement language includes a carve-out for reporting or bringing claims involving illegal or unlawful conduct. Employers should also verify there are no additional state or local law requirements which may affect some or all of their workforce. Taking this proactive approach can help employers minimize the chances of future legal headaches under the new law.
Elizabeth Payne-Maddalena is a Senior Associate at Berenzweig Leonard. She can be reached at epayne@berenzweiglaw.com.