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Congress Limits use of NDAs in Sexual Harassment Cases

by | Dec 15, 2022 | Firm News

President Biden recently signed the Speak Out Act. The bill passed the house 315-109 after having passed the Senate unanimously in September. The bill is the second bill passed this year prompted by the #MeToo movement, following the passage of a similar law from earlier this year that prevents companies from forcing sexual harassment cases into arbitration.

This new law is limits the applicability of nondisclosure agreements for allegations of workplace sexual assault or harassment. However, the bill only applies to those agreements signed before a dispute arises. Troublingly, the bill does not clarify what counts as a “dispute”—and arguments could be made that it means a lawsuit or just a complaint to HR. Courts will have to determine where to draw this line, but it is clear that this law will not affect agreements signed as a condition of settlement. The bill does not apply to any other kinds of complaints such as wage theft, or other types of discrimination.

Although there are still questions about how this law is going to be enforced, it is clear that the kinds of NDAs many employees sign on their first day of work will not be enforced against them if they speak out about workplace sexual harassment or assault.