New Legislation Voids NDAs in Sexual Harassment and Sexual Assault Allegations Under Federal, State, and Tribal Laws

By Wendi Lazar
Non Disclosure Agreement

On November 16, 2022, the U.S. House of Representatives passed the Speak Out Act, which seeks to nullify some nondisclosure agreements (NDAs) in sexual harassment and assault disputes. The Senate previously passed the bill on September 29, 2022, and President Biden indicated he would sign the measure once it reached his desk.

Rare Bipartisan Support Five Years After the Start of the #MeToo Movement

The new legislation comes in the wake of highly visible claims against Harvey Weinstein, Roger Ailes, and other top-level corporate executives that sparked the #MeToo movement. A wave of sexual harassment survivors pulled the curtain back on how companies use nondisclosure and nondisparagement restrictions to force plaintiffs into mandatory arbitration and conceal allegations and settlements from the public. These agreements prohibited survivors from sharing their stories, exposing their assailants, and warning other potential victims.

Former Fox News hosts and #MeToo activists Gretchen Carlson and Julie Roginsky advocated for the Speak Out Act. Estimates suggest one in three private-sector employees in the U.S. are subject to NDAs, which Ms. Carlson told Axios, "[m]ake you feel alone. Like you're crazy. Like maybe you're making it up." She ultimately sued Ailes, settling the case for $20 million, but remains bound by an NDA even after Ailes was ousted from Fox News in 2016 and died a year later.

Giving Survivors a Voice Outside of Arbitration Proceedings and the Courtroom

The Speak Out Act is the second bill addressing nondisclosure restrictions in instances of sexual harassment and assault. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act – which President Biden signed into law in March 2022 – bars companies from pressing plaintiffs in private, secretive arbitration proceedings.

Together, the two statutes empower sexual assault survivors to seek their day in court free of corporate defendants' heavy-handed silencing tactics.

However, the Speak Out Act does have a few limitations. For example, the law only applies to NDAs signed before a sexual harassment claim is made, such as agreements that are part of a new employee's hiring and onboarding. The law importantly does not apply to settlement provisions or NDAs that plaintiffs might sign to end a sexual assault claim

The law is also vague as to the definition of "dispute." Employers are expected to argue that dispute denotes only a formal legal proceeding such as a lawsuit or EEOC action. At the same time, employee rights groups contend it includes an informal complaint to a company human resources representative.

Only NDAs addressing sexual misconduct claims are covered, not other workplace disputes, such as wage and overtime violations and race- or age-based discrimination. NDAs remain an effective way to protect an employer's confidential business information, including trade secrets, customer lists, and proprietary processes.

Despite being the first legislation of its kind at the federal level, it resembles state laws already on the books in California, Illinois, New Jersey, and New York. Maine, Oregon, and Washington have different statutes restricting employers' use of NDAs.