This post first appeared on the Securities Arbitration Alert blog. The blog’s editor-in-chief is George H. Friedman, Chairman of the Board of Directors for Arbitartion Resolution Services, Inc.
The President has signed into law a new statute barring enforcement of predispute nondisclosure or nondisparagement clauses in disputes involving sexual assault or harassment.
Mr. Biden on December 7 signed the bipartisan Speak Out Act, S. 4524. The Act passed the House on November 16 by a vote of 315-109, and the Senate by unanimous consent on September 29. The text provides:
“… with respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which the conduct is alleged to have violated Federal, Tribal, or State law.”
There is a carveout protecting trade secrets and proprietary information, and the statute expressly does not preempt state law:
“that is at least as protective of the right of an individual to speak freely, as provided by this Act.”
The stated purpose:
“Prohibiting nondisclosure and nondisparagement clauses will 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.”
It was effective immediately: “with respect to a claim that is filed under Federal, State, or Tribal law on or after the date of enactment of this Act.”
Companion to EFASASHA
The Act complements the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFASASHA”), which the President signed into law on March 3. As we have reported many times, EFASASHA expressly amended the Federal Arbitration Act (“FAA”) to make predispute arbitration agreements and class action waivers voidable at the option of the victim. The new law has been codified as FAA Chapter 4. It consists of § 401 (definitions) and § 402 (no validity or enforceability).
(ed: That the new law also covers arbitrations to us is very clear; “disputes” is defined broadly in the Act.)
