Last week, President Biden signed the Speak Out Act, 42 U.S.C § 19401 et seq., which makes unenforceable in claims filed after this Act any non-disclosure and non-disparagement clauses in employment agreements which were signed before a sexual assault or sexual harassment dispute arises. In other words, this legislation does not seem to apply to separation/settlement agreements which are signed to resolve sexual assault and/or harassment. It also does not change contractual obligations to protect trade secrets. That being said, the definition of “non-disclosure clause” refers to obligations to protect the existence of the settlement or to not disparage a party relating to the contract, claim or case.
The legislation provides as follows:
SEC. 4. LIMITATION ON JUDICIAL ENFORCEABILITY OF NONDISCLOSURE AND NONDISPARAGEMENT CONTRACT CLAUSES RELATING TO SEXUAL ASSAULT DISPUTES AND SEXUAL HARASSMENT DISPUTES.
(a) In General.—With respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated Federal, Tribal, or State law.
(b) Continued Applicability Of State Law.—Nothing in this Act shall prohibit a State or locality from enforcing a provision of State law governing nondisclosure or nondisparagement clauses that is at least as protective of the right of an individual to speak freely, as provided by this Act.
(c) Continued Applicability Of Federal, State, And Tribal Law.—This Act shall not be construed to supersede a provision of Federal, State, or Tribal Law that governs the use of pseudonyms in the filing of claims involving sexual assault or sexual harassment disputes.
(d) Protection Of Trade Secrets And Proprietary Information.—Nothing in this Act shall prohibit an employer and an employee from protecting trade secrets or proprietary information.
The various terms are defined as follows:
SEC. 3. DEFINITIONS.
In this Act:
(1) NONDISCLOSURE CLAUSE.—The term “nondisclosure clause” means a provision in a contract or agreement that requires the parties to the contract or agreement not to disclose or discuss conduct, the existence of a settlement involving conduct, or information covered by the terms and conditions of the contract or agreement.
(2) NONDISPARAGEMENT CLAUSE.—The term “nondisparagement clause” means a provision in a contract or agreement that requires 1 or more parties to the contract or agreement not to make a negative statement about another party that relates to the contract, agreement, claim, or case.
(3) SEXUAL ASSAULT DISPUTE.—The term “sexual assault dispute” means a dispute involving a nonconsensual sexual act or sexual contact, as such terms are defined in section 2246 of title 18, United States Code, or similar applicable Tribal or State law, including when the victim lacks capacity to consent.
(4) SEXUAL HARASSMENT DISPUTE.—The term “sexual harassment dispute” means a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.
While some have implied that this will outlaw pre-dispute
non-disparagement and non-disclosure clauses, the Act only bars enforcement
of these clauses in specific instances which did not exist at the time the
agreement was signed.
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
