Sunday, November 27, 2022

Federal Restrictions on NDAs for #MeToo Claims Expected to Become Law - Lexology

The "Speak Out Act" (H.R 8827), a #MeToo-inspired bill prohibiting pre-dispute nondisclosure and nondisparagement clauses when sexual harassment or assault is alleged, has cleared Congress. Previously, President Biden issued a statement signaling that he strongly supports the bill and will sign. The bill will become effective upon his signature. Earlier this year, Congress passed another #MeToo-inspired bill, prohibiting the use of mandatory arbitration agreements for sexual harassment or assault claims. Employers should consider carefully reviewing employment-related handbooks, policies, and agreements with arbitration, nondisclosure, or nondisparagement terms to ensure compliance and enforceability.

"Speak Out Act"

The Speak Out Act effectively bans judicial enforcement of employment nondisclosure and nondisparagement terms, entered into prior to a dispute, with the goal of combatting workplace sexual harassment and assault, holding perpetrators accountable, and empowering victims to come forward.

The Speak Out Act passed the Senate by unanimous, bipartisan consent in September, and House lawmakers recently voted 315-109 in favor of the measure. Proponents of the Act favor the broad protections they argue it affords all Americans, while opponents are concerned about federal overreach into state contract law and believe the bill may lead to an increase in false claims to undo confidentiality agreements in unrelated disputes.

What Employers Need to Know

  • Nondisclosure...

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