The start of the new year is the perfect opportunity for employers to refresh their HR forms, agreements, and policies. Even if this routine maintenance is not at the top of the company’s to-do list, employers should take note of the Speak Out Act, as this new federal law has the potential to invalidate certain provisions commonly found in standard employment agreements.
The Speak Out Act, signed into federal law on December 7, 2022, invalidates pre-dispute non-disclosure and non-disparagement clauses related to sexual harassment and sexual assault. The law defines a non-disclosure clause as “a provision in a contract or agreement that requires the parties to the contract or agreement not to disclose or discuss conduct, the existence of a settlement involving conduct, or information covered by the terms and conditions of the contract or agreement” and defines a non-disparagement clause as “a provision in a contract or agreement that requires one or more parties to the contract or agreement not to make a negative statement about another party that relates to the contract, agreement, claim, or case.”
Notably, the law only renders such clauses unenforceable if they are entered into before the dispute arises. Thus, the law is unlikely to have a material impact on standard settlement agreements between employers and employees, as these are generally entered into after a dispute arises. However, compliance with the Speak Out Act will likely require some changes to standard onboarding forms such as employment agreements and confidentiality agreements.
Companies should seek counsel to review and modify their existing HR agreements to ensure they remain enforceable in light of the Speak Out Act.