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President Biden’s Speak Out Act

Speak Out Act, which invalidates nondisclosure agreements (NDAs) and non disparagement agreements designed to keep employees from discussing instances of sexual harassment and sexual assault.

President Joe Biden signed the law on Dec. 7, 2022, and it took effect immediately.

It’s common for employers to require employees to sign nondisclosure and non disparagement clauses during hiring, in severance agreements and in legal settlements. During the last several years, the #MeToo movement revealed that NDAs were often used to hide repeated sexual harassment and assault by executives or other high-profile employees, preventing victims from talking about the misconduct publicly. The new law is designed to stop companies from covering up misconduct. It applies only to nondisclosure and non-disparagement agreements signed before a dispute arises, not after.

Companies are increasingly including clauses in CEO contracts that allow for termination without severance pay in cases of sexual harassment, discrimination and violations of company policies. This contractual language strengthens the ability of companies to hold leaders accountable for bad behavior.

In March 2022, Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which bans pre-dispute arbitration agreements covering sexual assault or sexual harassment disputes. Several states, including California, Illinois, Maine, New Jersey, New York, Oregon and Washington, recently passed laws banning the use of NDAs in cases of sexual harassment or sex discrimination.

Employers should check their existing NDAs “to ensure what carve-outs are in place,”. Consider adding language stating that the NDA “only applies to the extent allowed by the law” and doesn’t apply in cases of sexual harassment and sexual assault.  Legally speaking, online harassment is just as serious as in-person harassment. Make sure workers understand that instant messages, texts and e-mails can violate company policies and result in termination.

Anti-harassment training should be linked to corporate values and ensure that workers feel comfortable reporting misconduct. It should emphasize why preventing harassment benefits the company and individuals.  The training should be “highly interactive” and multi-media.   Every employee should be tested to prove that they knew to whom to report and concerns and that they were crystal clear about what behaviors constitute illegal harassment.

Given the reputational and public relations risks, anti-harassment training should include information about micro-aggressions and cultural appropriation.  Training should emphasize the reporting mechanisms employees can use, not just the employer’s legal requirements. Talk about the various channels for employees to make complaints, as well as what co-workers should do if they witness harassment.

A single training session may not be enough.  Causing behavior change requires repetition, reinforcement, and leadership commitment.   The training should include the consequences that hold people accountable for misconduct.

Keep your training and the enforcement of anti-harassment policies consistent. You don’t want to send a message that there’s a double standard—one for senior executives and another for everyone else.