Speak Out Act Limits Enforcement of NDAs in Sexual Assault and Harassment
Tiger Woods’ former girlfriend Erica Herman recently asked a Florida court to release her from a nondisclosure agreement (NDA) she signed when she became romantically involved with the golfer. The NDA specified that any disputes between the two would be settled through “mandatory binding confidential arbitration.” She argued that the NDA was invalidated by the Speak Out Act of 2022, which restricts the enforcement of such contracts in sexual assault or harassment disputes.
Herman was an employee of Woods when their sexual relationship began. In her lawsuit, she alleged that he forced her to sign the NDA or be fired. She argued that the requirement constituted sexual harassment because he imposed different work conditions as a result of their relationship. The judge ruled against her, however, because her claims lacked “factual specificity.”
The Speak Out Act does not void NDAs or non-disparagement agreements or institute penalties for including them in contracts. It restricts the enforcement of these provisions in the context of sexual assault and harassment disputes. The statute does not define “dispute,” but the bill’s legislative history suggests that a lawsuit is not required, and public allegations may be sufficient.
Elements of the Speak Out Act
NDAs and non-disparagement agreements are common features of employment agreements and other contracts. The parties to an NDA may not discuss or disclose any information covered by the agreement, which generally includes the parties’ conduct and any legal settlement regarding conduct. The parties to a non-disparagement agreement may not make negative statements about the other parties.
The Speak Out Act notes that these provisions can be used to silence sexual assault and harassment victims “while shielding perpetrators and enabling them to continue their abuse.” The law is designed to “empower survivors to come forward, hold perpetrators accountable for abuse, improve transparency around illegal conduct, enable the pursuit of justice, and make workplaces safer and more productive for everyone.”
Under the Speak Out Act, clauses in NDAs and non-disparagement agreements are unenforceable if:
They are applicable to a sexual assault or harassment dispute, and
Part of an agreement that the parties entered into before the dispute arose.
“Sexual assault” is defined as “a nonconsensual sexual act or sexual contact.” The definition of “sexual harassment” refers to applicable federal, state, and tribal law.
Limitations and Related Laws
The Speak Out Act has specific limitations. First, it protects provisions in NDAs related to trade secrets and proprietary information. Second, it applies only to pre-dispute agreements — settlement agreements and other contracts executed after allegations have been made would be enforceable. However, it does not limit more protective state and local laws. Fifteen states have laws governing NDAs and non-disparagement agreements, with differing scope.
Congress overwhelmingly approved the Speak Out Act, with a unanimous vote in the Senate and a 315-109 vote in the House. President Biden signed it into law on December 7, 2022.
It followed on the heels of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which President Biden signed into law on March 3, 2022. That law gives sexual assault and harassment victims the option to avoid pre-dispute arbitration agreements and class- and collective-action waivers.
The court, not an arbitrator, decides whether the law applies to a particular dispute. Furthermore, the Act covers any case filed in federal, state, or tribal court that relates to a sexual assault or harassment dispute. Thus, an employee could bundle other related claims in a case and avoid arbitration.
What Organizations Should Do
Organizations should review their NDAs, non-disparagement agreements, employment agreements, employee handbooks, and other documents against the provisions of the Speak Out Act and related laws. Overbroad agreements covering “any and all claims” will likely need to be revised to expressly permit protected disclosures. Employers should also review their separation agreements to ensure that they do not prohibit disclosures of future allegations related to sexual assault or harassment.
In addition, employers should develop policies requiring prompt disclosure of romantic relationships involving coworkers. Such policies help protect employers from liability by establishing that the relationship was consensual. At the same time, disclosure enables managers to monitor relationships for sexual harassment and helps ensure a bias-free work environment.
Most importantly, employers should take action to reduce the risk of sexual harassment. The Speak Out Act notes that one-third of all women have experienced sexual harassment in the workplace, and up to 94% of those do not file a formal complaint. Equal Employment Opportunity Commission guidelines recommend that employers provide regular sexual harassment prevention training so that employees understand what types of conduct are prohibited and the consequences of violating company policies.
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