The Speak Out Act (the Act) prohibits judicial enforcement of nondisclosure and nondisparagement clauses with respect to sexual harassment and sexual assault disputes when the clause was entered into before the dispute arose. It applies to “claims” filed on or after December 7, 2022. Specifically, under the Act:

• A nondisclosure clause is unenforceable if it (i) was entered into before a dispute alleging sexual assault or sexual harassment under federal, state, or tribal law and (ii) “requires the parties not to disclose or discuss the conduct, a settlement involving the conduct, or information covered by the terms and conditions of the contract or agreement”; and

• A nondisparagement clause is unenforceable if it (i) was entered into before a dispute alleging sexual assault or sexual harassment under federal, state, or tribal law and (ii) requires one or more parties “not to make a negative statement about another party that relates to the contract, agreement, claim, or case.”

The Act does not specify the types of agreements to which it applies. However, it contains a statement of Congressional findings, which states (among other things) that nondisclosure and nondisparagement provisions in agreements with “current, former, and prospective employees, and independent contractors” (as well as agreements “between providers of goods and services and consumers”) can perpetuate illegal sexual harassment and sexual assault by silencing survivors and others who know of such conduct. Employers should assume that the Act covers all such agreements.

The Speak Out Act’s scope is in other respects relatively narrow. Notably, it does not limit the use of nondisclosure or nondisparagement clauses in agreements, such as separation or settlement agreements, entered into after a dispute concerning sexual harassment or sexual assault arises. It also expressly excludes from its reach protections for employer trade secrets and other proprietary information.

Employers should be aware, moreover, that the Act does not preempt state laws that are more restrictive of nondisclosure and nondisparagement provisions. For example, New York law prohibits nondisclosure provisions in settlement agreements (whether entered into before or after a dispute) relating to all forms of unlawful discrimination, unless confidentiality is the complainant’s preference. And Washington’s Silence No More Act, which became effective on June 9, 2022, prohibits (among other things) nondisclosure and nondisparagement provisions (whether entered into before or after a dispute) that prevent current, former, and prospective employees and independent contractors from disclosing conduct they reasonably believe to be unlawful harassment, discrimination, or retaliation; a wage and hour violation; sexual assault; or other conduct “recognized as against a clear mandate of public policy.” Other states have adopted restrictions that vary in scope.

Employers should also bear in mind the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (H.R. 4445), enacted earlier this year, which prohibits enforcement of pre-dispute arbitration agreements and class- and collective-action waivers in sexual assault and sexual harassment disputes.

Employers should review their standard employment, confidentiality, arbitration, and independent contractor agreements for compliance with the Speak Out Act and related laws.