House Passes Bill Limiting Sexual Harassment Nondisclosure Agreements

On November 16th, 2022, the U.S. House of Representatives approved a bill dubbed the “Speak Out Act,” which makes sexual assault and sexual harassment nondisclosure agreements entered into before a dispute judicially unenforceable. Previously, the Speak Out Act passed in the U.S. Senate in September 2022. Currently, the bill will head to President Joe Biden’s desk for consideration. The Speak Out Act cites several findings and statistics that support the need to limit sexual harassment nondisclosure agreements. Sex and gender represent one of seven main protected classes in the U.S. However, sexual harassment and assault remain pervasive in the workplace. In June 2022, the U.S. Equal Employment Opportunity Commission (EEOC) announced that a company would pay $361,000 to settle a sexual harassment case.

Background of the Speak Out Act

The Speak Out Act presents a number of findings regarding sexual assault and sexual harassment nondisclosure agreements, as well as the pervasiveness of forced sexual misconduct in the workplace. Briefly, these crucial findings support the need to limit pre-dispute nondisclosure and non-disparagement clauses relating to sexual assault and harassment. In detail, the bill presents the following:

1. Workplace sexual harassment and assault are pervasive.
2. 81% of women and 43% of men experience sexual harassment or assault during their life.
3. One in three women has faced harassment in the workplace, but only 87% to 94% file a complaint.
4. Sexual harassment forces many women to leave their position or careers.
5. In order to combat sexual harassment and assault, victims must be free to report and publicly disclose abuse.

However, nondisclosure and non-disparagement clauses between employers and employees can silence victims and survivors of sexual harassment and assault. In effect, these types of provisions perpetuate illegal conduct and shield perpetrators. Specifically, the Speak Out Act defines a nondisclosure clause as “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.” Meanwhile, a non-disparagement clause is 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.”

Limiting Sexual Harassment Nondisclosure Agreements

According to the bill, prohibiting sexual assault and sexual harassment nondisclosure agreements and non-disparagement clauses can empower victims and survivors. Limiting these provisions will keep employers accountable, improve transparency regarding illegal conduct, and make workplaces safer. The bill, therefore, makes pre-dispute sexual assault and sexual harassment nondisclosure agreements and non-disparagement clauses unenforceable in court. Additionally, the bill allows state and local law to enforce any provision governing nondisclosure or non-disparagement clauses if it is at least as protective as the Speak Out Act. Notably, the bill does not prohibit an employer or employee from protecting “trade secrets and proprietary information.”