The Speak Out Act is the latest #MeToo inspired legislation which was signed into law by President Biden on December 7, 2022. The Act prohibits predispute nondisparagement and nondisclosure clauses for sexual assault and sexual harassment disputes. Nondisparagement clauses prohibit parties from making negative statements about a contract, agreement, claim, or case whereas nondisclosure clauses prohibit parties from disclosing or discussing conduct, the existence of a settlement, or information covered by the terms and conditions of the contract or agreement. Additionally, the Act explicitly notes trade secret and proprietary information protections are not affected by this new law.
While “dispute” is not defined, its inclusion in the final version suggests a broad definition. Previous versions prohibited these clauses in pre-lawsuit scenarios, but that language was likely changed because of the negative impact it would have on settlements in these situations. Any nondisparagement or nondisclosure provision that is a part of a settlement or severance agreement signed after a claim is brought would still be enforceable. A broad reading suggests an incident with at least an allegation would be a covered dispute under the Act.
The Speak Out Act is only the next piece of the already complex employment law puzzle. In 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act became law, invalidating and making unenforceable arbitration agreements and joint action waivers related to sexual harassment and assault disputes signed before such disputes arise.
Employers should review their current policies, handbooks, and agreements and remove references to sexual harassment and sexual assault from predispute nondisparagement and nondisclosure clauses. As always, it is important to remember state and local laws throughout the country may be more restrictive than the Speak Out Law and place additional restrictions on employers.