President Biden recently signed into law the Speak Out Act (the “Act”), which bars the use of preemptive non-disclosure agreements, or “NDAs,” in cases of workplace sexual assault and sexual harassment. The Speak Out Act was approved by the U.S. Senate in September with unanimous support and passed the House in mid-November 315–109. This post-#MeToo movement legislation will have a profound impact on many victims, despite failing to remove all secrecy and silence from workplace misconduct.
What Does the Speak Out Act Do?
Workplace NDAs forbid workers from discussing particular topics, including workplace misconduct, and often carry harsh financial penalties for failing to abide by their terms. Such NDAs are often included in paperwork when onboarding a new hire. These agreements currently restrict over one-third of all U.S. workers, but many are likely unaware they even signed an NDA upon hire. The Speak Out Act makes it illegal to require such “preemptive” NDAs, meaning employees can no longer be forced to remain silent about workplace misconduct.
The Act was consistently championed by Gretchen Carlson and Julie Roginsky of the advocacy group Lift Our Voices. The two women are former Fox News employees who endured sexual harassment at the media giant. They both signed NDAs with Fox at the start of their employment—the kind of agreement now rendered illegal—as well as NDAs upon reaching legal settlements with Fox, which remain legally enforceable.
Why the Speak Out Act Matters
The Speak Out Act is significant for several reasons. Victims of workplace misconduct often feel as if they are the only ones who are enduring harassment or bullying. Being subjected to sexual assault or sexual harassment at work can be particularly isolating, leading workers to become less engaged with their colleagues and their work.
The Act now frees employees to talk with one another about the misconduct they have suffered, helping to provide some measure of emotional and psychological safety. If nothing else, victims often learn they were not the only ones subjected to misconduct. As a result, they can support each other and find some measure of solace in the knowledge that they are not alone.
Allowing workers to openly discuss workplace abuse is more likely to spur an employer to remedy any current situations of misconduct. It can also incentivize workplaces to establish preventative measures so that abuses do not occur in the future.
What Is Not Covered by the Act?
The Act applies to NDAs that were signed prior to a “dispute,” such as agreements signed upon hire as part of an onboarding packet. Employees experiencing misconduct are able to talk about that misconduct as long as they did not sign another NDA or other restrictive agreement after the dispute arose.
There is some disagreement as to when a “dispute” arises. Is it when the misconduct first occurs? Or when an employee complains to HR of workplace abuse? Or is it only once an investigation is underway or a lawsuit is filed? Courts will have to fine-tune the definition to help guide litigation under the Act.
One thing is clear, however: the Speak Out Act does not apply to NDAs signed after a dispute has arisen. This means that if a settlement is reached to resolve a complaint of workplace harassment, and the settlement agreement contains a non-disclosure provision (which it almost certainly will), then that NDA remains legally enforceable. The signatories to the agreement will have to keep the details of the underlying complaint strictly confidential, which could permit an employer to continue abusing employees.
Moreover, the Act does not prohibit NDAs concerning workplace abuse other than sexual assault and sexual harassment. That means it does not cover discrimination or retaliation, and does not pertain to harassment on other bases, such as race or religion. It further does not cover other workplace disputes, such as wage claims or whistleblower claims.
Speak Out Follows the Ban on Arbitration
The Speak Out Act is the second major piece of federal legislation to pass this year aimed at removing the veil of secrecy from workplace disputes. President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”) in March. That act barred “pre-dispute arbitration clauses” in cases of sexual assault or sexual harassment.
Similar to NDAs, many workers are made to sign arbitration agreements (or contracts containing arbitration clauses) upon hire. By signing, workers waive their constitutional right to a trial by jury and agree instead to settle disputes in arbitration, a confidential forum sealed from public scrutiny. The EFAA covers only arbitration agreements signed prior to a dispute, much like Speak Out. Workers may still choose to settle legal claims privately in arbitration if they desire.
Speak Out was co-sponsored by Representative Cheri Bustos (D-IL). Bustos noted that these two acts together constitute "the most significant labor legislation this century."
The Positive Domino Effect
Speak Out may help spur changes to other laws and policies. The Act is the latest is a series of legislative moves to ban NDAs in the employment context. For instance, 17 states currently restrict the use of NDAs in the workplace. Speak Out’s passage may provide the necessary motion to spur additional states and localities to pass their own related laws.
Some companies have already banned these types of NDAs, including Microsoft. The successful passage of Speak Out may now push businesses to enshrine their legal obligations in their office policies. In time, we may even see similar legislation or company policies that bar NDAs in connection with discrimination, retaliation, and other forms of harassment.
What Should Employers Do?
Employers who are concerned about the potential presence of abuse in their workplaces can take some simple steps toward creating a healthier environment:
- Have a strong employment handbook, policies, and agreements. Employment documents should abide by the law and attempt to forge a healthy workplace culture. They should clearly lay out what is expected of a workforce and the procedures they are expected to follow. And of course, these documents should be free of any pre-dispute arbitration clauses or NDAs!
- Provide regular workplace training. Workplace policies don’t mean much if no one is aware they exist or can’t seem to remember what they are. Teams need regular training to be reminded of their expectations, obligations, and rights.
- Provide a safe reporting mechanism. If a problem does arise, there should be a clear procedure for reporting misconduct that will not incur retaliation from superiors.
- Avoid even the appearance of retaliation. Retaliation for making a good-faith report of sexual assault or harassment is against the law. But even more importantly, it sends a chilling message to a workplace that it is not safe to report abuse. It is best to avoid even the appearance of retaliation in order to ensure team members feel safe and confident.
- Be ready to investigate. When a report of misconduct is made, there should be a plan for conducting a comprehensive and objective workplace investigation. This can be done in-house or with the help of external employment attorney investigators.
The combination of the EFAA and Speak Out are forging a new era in the American workplace. Workers are now free to share their experiences with one another or externally when they encounter misconduct. Both employers and employees should look forward to safer environments and healthier workplaces as a result.