Pre-Dispute Sexual Assault/Sexual Harassment NDAs Limited by Federal “Speak Out Act”

President Biden has signed into law the federal “Speak Out Act.” The Act covers sexual assault and harassment disputes as defined under applicable federal, state, and tribal law. It limits the enforceability of non-disclosure and non-disparagement clauses in pre-dispute agreements covering sexual assault and sexual harassment disputes. The act became effective on December 7, 2022, and applies to non-disclosure and non-disparagement clauses in agreements that were entered into and disputes that were active prior to that date. Non-disclosure and non-disparagement clauses in NDAs, such as separation or settlement agreements, entered into following a sexual assault or sexual harassment dispute are not impacted by the act. Because the act only applies to pre-dispute agreements, it may have limited implications for employers. Given the new act, employers using non-disclosure and non-disparagement agreements at the outset of employment or during the employment lifecycle should consider creating proper carve-outs for sexual assault and sexual harassment issues.