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The “Speak Out Act” pertains to nondisclosure agreements (NDAs) that relate specifically to sexual misconduct, harassment, or assault. This proposed federal legislation has just passed the House and the Senate and will likely be signed by President Biden. So, how does this law affect the workplace and what does it mean for human resources departments? Here is what you need to know.

What Is a Nondisclosure Agreement?

A nondisclosure agreement, commonly referred to as an NDA, is an agreement between an employer and an employee that controls what an employee can disclose about their job. In most situations, they are used to prevent employees from leaving to work for a competitor and sharing proprietary information obtained from their prior employer. However, in some cases they are also used to maintain the privacy of employees involved in sexual harassment complaints in the workplace.

What Does the Speak Out Act Do?

Pursuant to this proposed legislation, if you signed an NDA when you were first hired that prohibits you from telling your co-workers or anyone else about sexual harassment or misconduct that you experience in the workplace, it will no longer be enforceable. In other words, your employer cannot take any action against you for speaking out about your sexual harassment experience. To be clear, if these agreements exist in your company, they are not illegal, they just cannot be enforced.

The Speak Out Act Does Not Apply to an NDA That is Part of a Settlement

The Act applies only to pre-dispute NDAs. That means a valid NDA signed after the employer and employee have been involved in a legal dispute as part of a settlement is still fully enforceable. The goal of NDAs as part of a settlement agreement is to keep the terms of settlement agreement confidential, which is often a benefit to the employer.

What Should HR Departments Do if the Bill is Passed?

If the Speak Out Act is signed into law, HR departments need to review their onboarding process and the documents presented to new hires to determine whether they include these unenforceable provisions. Even if your company’s NDA does not pertain directly to sexual harassment or sexual misconduct, it is wise to have any existing NDA provisions reviewed to ensure they do not cross the line.

In fact, it wouldn’t hurt to audit your entire employee onboarding process to ensure compliance with this and other relevant laws. Remember that onboarding is essentially the process of integrating new employees into the workplace. This includes helping new employees to become familiar with their workspace, company policies and procedures, and the workplace culture.

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