Page 27 - BusinessWest January 9, 2023
P. 27

Talking Points
Speak Out Act Eases Restrictions on Harassment Claims
BY BRIANA DAWKINS, MICHAEL ROUNDY, AND MARY JO KENNEDY
  “The act’s protections
apply not only
to complaints of sexual harassment or sexual assault towards an employee, but also to complaints about sexual harassment and assault involving other individuals.”
Effective Dec. 7, 2022, a new federal law, the Speak Out Act, limits the enforceability of pre- dispute non-disclosure and non-disparagement
agreements relating to sexual-harassment or sexual- assault disputes in the workplace. Such agreements that were entered into before an actual dispute arises are now unenforceable.
The Speak Out Act defines a pre-dispute agree- ment as one that is entered into between an employer and an employee before a sexual-harassment or assault dispute ‘arises’ — that is, before an allegation of sexual assault and/or harassment is made. Often, employers require employees to sign non-disclosure and non-disparagement agreements upon commence- ment of employment in order to protect confidential or otherwise private employer information. Under
the Speak Out Act, these clauses can no longer be enforced with respect to any sexual-harassment or sexual-assault claim that may arise in the future.
A non-disclosure clause is defined in the act as “a provision in a contract or agreement that requires the parties to a contract and/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.” A non-disparagement clause is “a provision in a con- tract 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 con- tract, agreement, claim, or case.”
A sexual-harassment dispute involves “conduct that is alleged to constitute sexual harassment under the applicable federal, tribal, or state law.” A sexual- assault dispute involves a “non-consensual sexual act or sexual contact, as such terms are defined in [federal criminal law] or similar applicable tribal or state law, including when the victim lacks capacity to consent.”
The act’s protections apply not only to complaints of sexual harassment or sexual assault towards an employee, but also to complaints about sexual harass- ment and assault involving other individuals. The act’s provisions do not prohibit an employee and an employer from entering a non-disclosure or non- disparagement agreement after a complaint of sexual harassment or assault has arisen. Thus, the act does not prohibit such clauses, for example, in agreements settling sexual-harassment or sexual-assault claims after they are asserted. However, employers should exercise caution, as such clauses in settlement agree- ments may have significant tax implications for employers under the 2017 Tax Cuts and Jobs Act.
The congressional rationale expressed through
BRIANNA DAWKINS
MICHAEL ROUNDY
MARY JO KENNEDY
  the language of the act is clear. Many women
Speak
Continued on page 29
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