This month, President Joe Biden signed a law called the Speak Out Act. It prohibits employers from using non-disclosure agreements (NDAs) or clauses in an agreement signed as a condition of employment from preventing employees from talking or writing about their claim of workplace sexual harassment or assault.
Note that the law does not prevent employers from including an NDA as part of a settlement reached with an employee regarding their claim of sexual harassment or abuse. An employee doesn’t have to agree to the settlement if an NDA is included, but employers are allowed to include it as a term of the settlement – at least in Florida and most states. Some states have banned those as well.
Ironically, this is why former Fox News anchor Gretchen Carlson – who’s been at the forefront of fights against NDAs related to sexual harassment and assault – still can’t talk about her own experience. It’s been the subject of movies. However, she can’t discuss it herself because it was a term of her multi-million-dollar settlement with the company and its former chief.
What additional changes might be addressed in future legislation?
Some lawmakers and advocates for the new law are already looking to the future. They believe that NDAs signed as a condition of employment should not be used to prevent people from speaking out about any type of workplace harassment or discrimination based on race, gender, disability or other protected classes. Sometimes people can experience sexual harassment that’s also based in part on their race, sexual orientation or something similar.
Certainly, NDAs serve a necessary purpose when they’re used to prevent employees from disclosing trade secrets or other protected information that could harm a company if competitors found out about it or hurt clients if it was disclosed. However, increasingly, it’s being argued that they shouldn’t be used to hide wrongdoing by those within the company from being made public.
As an employer, it’s crucial to work with professionals who know the law (both state and federal) as you develop and seek to enforce all of your agreements and policies. Having experienced legal guidance can save you significant time, money and damage later.