Speak Out Act Advances in Senate
Democratic and Republican lawmakers have come together for the second time this year in an effort to increase transparency for incidents of sexual harassment and assault in the workplace. On September 15, 2022, the Senate Judiciary Committee, acting on a bipartisan basis, unanimously voted to advance the Speak Out Act (S.4524), setting it up for a vote by the full Senate. If passed, the bill would invalidate pre-dispute nondisclosure and nondisparagement agreements that prevent workers from speaking out about sexual harassment and assault in the workplace. Because the bill only applies to agreements reached before a dispute arises, such provisions would still be permissible under federal law in agreements to settle such claims. A companion bill has been introduced in the House of Representatives. If passed, the law would apply to any claim that is filed after its passage, thus invalidating prior agreements as well. Earlier this year, Congress passed and President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (H.R.4445), prohibiting employers from requiring employees to arbitrate these claims. Increased transparency was a concern behind the passage of that bill as well.
Employers in New York are already subject to state laws that limit the use of nondisclosure provisions, though that law applies to settlement agreements. Under §5-336 of the New York General Obligations Law and §5003-B of the New York State Civil Practice Law and Rules, the parties are prohibited from including a nondisclosure provision in settlement agreements that would prohibit employees from discussing the underlying facts of discrimination claims, unless the inclusion of such provision is the preference of the employee. To try to ensure any such provision is the preference of the employee, the employee must be given 21 days to consider such a term, followed by a 7-day revocation period. The parties must then memorialize this process in a separate agreement that affirms the provision is the preference of the employee.
This is an evolving area of the law and employers should monitor the progress of the Speak Out Act, which, if passed, will impact not only the use of nondisclosure and nondisparagement agreements in employment agreements, but could invalidate such terms in prior agreements as well.
This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Partner Jill Kahn Marshall, who counsels individuals and corporations in the areas of employment law, litigation and dispute resolution, and healthcare. Ms. Marshall is admitted to practice law in New York and Massachusetts, as well as the District Courts for Massachusetts and the Southern and Eastern Districts of New York.
Research contributed by Ariana Zhao.