New Federal Employment Law Invalidates Pre-Dispute NDAs
January 19, 2023 | US Law Updates
Article by: Associate Michael A. Carlin
The #MeToo movement has led to the passing of several notable federal laws to address sexual harassment in the workplace. On December 7, 2022 President Biden signed another such law, the Speak Out Act.
The Speak Out Act prohibits the enforcement of pre-dispute, non-disclosure or non-disparagement clauses related to sexual harassment or abuse allegations. The new law only applies to pre-dispute non-disparagement and non-disclosure agreements.
Pre-dispute non-disparagement and non-disclosure agreements are contracts that some employers require all employees to enter into at the time of hire. These types of pre-dispute nondisclosure agreements have been unenforceable for many years in California, and several other jurisdictions have enacted legislation to similarly restrict the ability of employers to enforce such types of non-disclosure agreements. Now, pre-dispute non-disclosure and non-disparagement clauses are unenforceable throughout the entire U.S.
It is important to note that the Speak Out Act only applies to claims of sexual harassment and sexual assault, the law does not restrict employers from requiring employees to agree to non-disclosure agreements in connection with settlement of claims for sexual harassment or when terminating an employee. Although, even post dispute confidentiality agreements made in connection to a harassment or discrimination settlement are subject to certain limitations when an employee resides in California, New York, or certain other jurisdictions.
The laws governing employer duties in responding to claims of harassment and discrimination change every year. It is important for business owners to regularly review and update their employment policies and forms to ensure compliance with these new laws.
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