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‘Speak Out’ Act: What Does It Mean For Employers?

Many employers have tried to protect themselves from the fallout from sexual harassment or sexual assault allegations by utilizing “nondisclosure” and “non-disparagement” clauses that bar an employee from talking about certain types of conduct that may have occurred or from making negative statements about an employer related to such conduct.

In many instances, employers have made employees sign these contracts preemptively, before any allegation of sexual misconduct had come to light.

Employee advocates say the effect of these provisions is to perpetuate harmful and illegal conduct by silencing survivors of sexual harassment, assault and retaliation.

However, in the wake of the Speak Out Act, which was signed by President Joe Biden late last year, employers need to understand that such provisions are no longer enforceable in court.

The law specifically renders non-disclosure and non-disparagement clauses related to allegations of sexual assault and/or harassment void if they’re entered into “before the dispute arises.”

Although there is some uncertainty about what that phrase means, the general understanding is that once someone makes an allegation of sexual assault or harassment, a dispute has arisen, even if the worker has not yet filed suit.

This means that employers can still seek to have an employee making such accusations sign a nondisclosure or non-disparagement clause as part of an agreement to resolve an existing dispute.

But an employer will be on much shakier ground trying to enforce blanket agreements that purport to cover potential disputes that might arise.

Though the new law doesn’t appear to impose penalties for non-compliance, no employer wants to be caught flat-footed thinking they can rely on agreements in place only to find out that those agreements aren’t enforceable. That’s why it’s a good idea have an attorney review your employment agreements, handbooks and policies with the new law in mind.

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