President Biden Signs Speak Out Act

On December 7, President Biden signed the Speak Out Act, a new law that limits the enforceability of pre-dispute nondisclosure and non-disparagement clauses in sexual assault and sexual harassment matters. The Act takes immediate effect.

In disputes involving sexual assault or sexual harassment, the Act provides that “no nondisclosure clause or non-disparagement 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.” Its immediate impact will be to prevent employers from including broad non-disclosure and non-disparagement clauses in contractual or other documents that are entered into before a dispute arises.

Because the law applies only to pre-dispute nondisclosure and nondisparagement claims, the Act should not prevent parties from including such clauses in settlement agreements that are entered into after a court or administrative action has been filed. Nothing in the Act prohibits an employer from using appropriate contractual language to protect trade secrets and confidential information.

The enactment of the Speak Out Act continues an ongoing legislative effort at the state and federal levels to limit the ways that an employer can reduce risk exposure through pre-dispute agreements. It is the second piece of federal legislation related to sexual misconduct claims that has been enacted this year. In February, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which invalidated pre-dispute arbitration provisions that would prohibit a party from filing a lawsuit relating to sexual assault and sexual harassment.

If you have any questions about the Speak Out Act, please call our office. Thank you.

This Client Alert provides a general overview of new legal developments. It is not intended to provide legal advice. If you have questions or would like more information about how these developments may affect your business, please contact us at (570) 341-8800.