New Federal Law
On December 7, 2022, President Biden signed a bill into law to protect the voices of individuals who may experience sexual harassment and/or assault in the workplace. Titled the Speak Out Act, the law limits “the judicial enforceability of pre-dispute nondisclosure and nondisparagement contract clauses” in an effort to “make workplaces safer and more productive for everyone.” The act follows the passage and enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act in February of 2022, which limited use of employment arbitration agreements or joint-action waivers regarding sexual harassment or sexual assault claims entered prior to a dispute in an effort to protect employees’ ability to litigate sexual harassment or assault claims in court.
Similarly, the new Speak Out Act prevents enforcement of nondisparagement or nondisclosure agreements entered before any sexual harassment or sexual assault dispute has arisen. Practically speaking, the Speak Out Act only prevents employers from using mandatory nondisclosure or nondisparagement clauses as prophylactics before an employee has raised a claim or complaint; it still allows nondisclosure or nondisparagement clauses in settlement or separation agreements reached after a dispute regarding sexual harassment or assault has arisen. Due to its narrow scope, the Speak Out Act is unlikely to have a significant impact on employers.
While the law may not be as broad as certain similar state-level laws, its definitions of sexual assault dispute and sexual harassment dispute open the door to somewhat broad interpretations of the act. Further, it recognizes the use of agreements in a variety of circumstances — “between employers and current, former, and prospective employees, and independent contractors, and between providers of goods and services and consumers” — which creates a wide class of protected individuals.
Relevant Virginia Law
Virginia employers should be aware that a Virginia statute, Code 28.3-67.4, also places limitations on nondisclosure and confidentiality agreements regarding sexual assault. Virginia’s statute prohibits employers from requiring employees to sign a nondisclosure or confidentiality agreement regarding any claims of sexual assault as a condition of employment. Unlike the Speak Out Act, Virginia’s law only pertains to sexual assault claims, which include rape, forcible sodomy, aggravated sexual battery, and sexual battery, but not sexual harassment. Further, because Virginia’s law only implicates agreements that are “a condition of employment,” it does not apply to separation or settlement agreements entered after a dispute has arisen and the employee is departing from the company.
Concluding Thoughts
Employers should review their employment agreements, arbitration agreements, and nondisclosure agreements to determine whether they include clauses that prohibit employees—or independent contractors—from bringing sexual assault or harassment claims. We also recommend that employers examine the state and local laws that they may be subject to and adjust their employee agreements accordingly.
