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Ban on Some NDAs for Sex Harassment Going Nationwide

Congress has passed the Speak Out Act. The Act limits the judicial enforceability of non-disclosure and non-disparagement contract clauses for sexual harassment and sexual assault disputes. According to the Act's Findings section, 81% of women and 43% of men have experienced some form of sexual harassment or assault. The Act further reads, "In order to combat sexual harassment and assault, it is essential that victims and survivors have the freedom to report and publicly disclose their abuse."

The Act specifically precludes the enforcement of non-disclosure and non-disparagement clauses entered into before "the dispute arises." Congress did not define the term "dispute" or indicate when it "arises." Thus, it could refer to a complaint to human resources or when an employee files a lawsuit. Companies using NDAs as part of their mandatory human resources forms for new hires should consult their attorneys in light of the Act's prohibitions. Forbes estimates about 1/3 of the workforce signs these types of forms. By lifting their enforceability, proponents believe the new law will allow employees to share their experiences with coworkers. The Act does not apply to other kinds of discrimination complaints. The Senate passed the Act unanimously on September 29, 2022, and the White House followed with a public letter supporting the passage of the Act. The House of Representatives passed the Act by a vote of 315 to 109. Congress ended the use of mandatory arbitration in sexual harassment and sexual assault cases in February 2022.