President Biden recently signed the Speak Out Act, the latest in a set of bills focusing on workplace sexual harassment and sexual assault. According to the legislative findings of the Act, 81% of women and 43% of men have experienced some form of sexual harassment or sexual assault throughout their lifetime, one in three women has faced sexual harassment in the workplace during her career but an estimated 87–94% of those who experience sexual harassment never file a formal complaint. Sexual harassment in the workplace has been identified as forcing many women to leave their occupation or industry or pass up opportunities for advancement.
A key to combating this issue is ensuring that victims, and anyone in the workforce that may become one, have a voice and are not prevented from using it. Congress identified nondisclosure and nondisparagement agreements as tools that have been used to silence victims of sexual assault and sexual harassment and targeted those agreements with the Speak Out Act. Under the Act, no nondisclosure clause or nondisparagement clause agreed to before a sexual harassment or sexual assault dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated the law. While most nondisclosure agreements signed at the outset of employment focus on proprietary information and trade secrets, some agreements reach legal disputes, misconduct, and other aspects of the employer-employee relationship. Upon passage, the Speak Out Act will nullify these agreements that are signed prior to a sexual harassment or sexual assault dispute.
So, what are the implications for employers? Employers should revisit their employment agreements and handbooks to ensure that they comply with the Speak Out Act when it is passed into law. Any nondisclosure or nondisparagement agreements surrounding sexual harassment or sexual assault disputes will be unenforceable if entered before disputes arise, so their inclusion in employment paperwork would be ineffectual. The scope of the Speak Out Act is limited, so there should be a limited impact on an employer’s conduct, but it is better to address this new law ahead of time than to operate believing you are more protected than the law allows. Another thing to be mindful of is that the Speak Out Act does not impact the applicability of any state law governing these agreements so long as the state law is at least as restrictive as the Speak Out Act, so check your state laws to ensure you are compliant with them as well. Texas has neither adopted nor otherwise enacted any laws regarding predispute nondisclosure or nondisparagement agreements in the workplace sexual harassment or sexual assault space.
This legislation follows numerous changes to the law governing workplace sexual harassment and assault cases. For more discussion surrounding the 2017 tax law limiting the deductibility of sexual harassment and abuse settlements containing nondisclosure provisions, click here. For more discussion of the 2022 amendment to the Federal Arbitration Act precluding mandatory, predispute arbitration agreements of sexual assault and harassment disputes, click here.