Senate Passes Bill Limiting Nondisclosure Agreements

By Greg Hoff posted 09-30-2022 00:00


The Senate passed the SPEAK Out Act (S. 4524),  which would invalidate pre-dispute nondisclosure and non-disparagement agreements in cases involving sexual assault or sexual harassment. The bill received bipartisan support and passed by unanimous consent without a recorded vote, and continues the trend of bipartisan Congressional action targeting  pre-dispute agreements.  

The SPEAK Out Act – which covers employees and independent contractors – makes pre-dispute nondisclosure and non-disparagement agreements unenforceable in cases involving sexual assault or sexual harassment. The bill is intended to “empower survivors to come forward, hold perpetrators accountable for abuse, improve transparency around illegal conduct, enable the pursuit of justice, and make workplaces safer and more productive for everyone.” A study conducted in 2021 found that more than half of workers for firms surveyed were covered by an NDA.

The bill is the latest Congressional action directed at pre-dispute agreements. In March, the House passed the FAIR Act (H.R. 963), which bans pre-dispute arbitration agreements. That bill has yet to receive action in the Senate, but similar to the SPEAK Out Act, has garnered some bipartisan support. 

The scope of the bill is notably narrow, as it only applies to pre-dispute agreements, and only in sexual harassment and sexual assault contexts. The definition of “pre-dispute” remains an open question as well; whether that means agreements signed before a claim is asserted or before the first instance of harassment or assault is left unclear by the current text of the bill. If left unaddressed by the House, the scope of the bill will be determined in the courts. 

Outlook: The SPEAK Out Act will move to the House, where a companion bill was advanced through the Judiciary Committee in July before stalling. Given the current Democratic majority in the House, as well the bipartisan, bicameral support the bill has received since being introduced, it is almost certain that it will pass the House before the end of the year, and increasing the possibility that it would become law soon thereafter.