A new law called the Speak Out Act prohibits employers from using nondisclosure and nondisparagement agreements to block the victims of sexual harassment and assault from making their stories public
Employers should remain aware that some state or local laws also restricting NDAs, such as those enacted in California, New Jersey and Washington, will remain in force if they a stronger than the federal law.
The issue addressed -- NDAs – has been a major source of anger and concern since the first days of the #MeToo movement, when it became evident these contract terms were used widely to hide the culpability of individuals and employers, covering up the depth and extent of the sexual harassment problem.
The SOA was passed by Congress with overwhelming bipartisan support and went into effect when President Biden signed it on Dec. 7.
The new law applies only to pre-dispute NDAs, such as those included in employment contracts. Employers are still allowed to use these provisions as part of settlement agreements regarding disputes involving sexual harassment
All employers should maintain strong and clearly articulated anti-sexual harassment policies in place, attorneys advise. Those principles should be part of training and regularly reinforced periodically.
Employers should review all pre-hire and standard employment agreements and other document templates to ensure none have these kinds of NDAs.
To the extent that employers may make use of a workforce with independent contractors, they advise checking those agreements to make sure they are compliant as well. Also make sure to adhere to smart harassment complaint handling procedures to address issues quickly and fairly when they arise.