A law signed this month by President Joe Biden places a new limitation on what employers can restrict with nondisclosure agreements (NDAs) in their employment contracts. Specifically, the Speak Out Act prohibits employers from using NDAs signed as a condition of employment from being used to keep employees silent about sexual harassment or assault they’ve suffered.
The new law is considered a “next step” in ending restrictions placed on these victims. Earlier this year, President Biden signed a law that removed the requirement for employees to settle these cases in arbitration.
Gretchen Carlson, whose lawsuit against former Fox News chief Roger Ailes has been widely reported and dramatized on film, has been a staunch advocate for legislation ending the kind of NDA that kept her from speaking out about her harassment.
The scope of the new law is limited
It should be noted that the law does not address NDAs that are signed as part of a settlement with an employee over a sexual harassment claim. Those can still be enforced. However, employers can’t reach back and invoke an NDA signed by an employee when they started their job to prevent them from talking about their sexual harassment.
The Speak Out Act also doesn’t address any other kind of harassment or discrimination, such as that related to age, race, sexual orientation and other protected classes. However, many advocates of this legislation are calling for these to be addressed in the future. Julie Roginsky, another former Fox News personality who advocated for this law, says, “Everything that is subject to discrimination and retaliation should not be bound by secrecy.”
It’s crucial for employers to keep abreast of local, state and federal laws that affect their contracts and employment policies. Once calls for change start, new laws can be enacted relatively quickly if there’s enough advocacy for them and people in elected office support the change. Having regular legal guidance can help you avoid unnecessary and reputation-harming litigation.