There have been more sexual harassment lawsuits against employers over the last several years as this misconduct became publicized. But nondisclosure clauses and forced arbitration agreements allow this problem to continue in many cases by compelling victims to remain silent.
Employment law for employees was strengthened with two federal laws addressing nondisclosure agreements and arbitration, which allowed sexual harassment and abuse to continue in the workplace. Another law addressing this issue was recently passed and is expected to be signed into law.
First, the 2017 Tax Cuts and Jobs Act amended the Internal Revenue Code concerning tax deductions for money paid to settle sexual harassment or abuse claims. An employer who claims a tax deduction for the costs of settling these claims may not include a nondisclosure agreement into the settlement.
The Ending Forced Arbitration of Sexual Assault and Harassment Act, enacted in 2021, allows employees to sue employers for sexual harassment or sexual abuse claims even if they signed an agreement requiring private arbitration of these claims. Employees may also bring class action lawsuits for sexual abuse and harassment claims even if they previously waived their right to bring these claims.
Speak Out Act
Congress passed a law in November, the Speak Out Act, which is awaiting presidential signature. It will prohibit enforcement of pre-dispute nondisclosure or non-disparagement agreements regarding sexual assault or harassment allegations. It covers agreements entered before harassment or abuse claims are made.
A dispute under the SOA is defined as a lawsuit or charged filed with an administrative agency such as the U.S. Equal Opportunity Commission. A dispute may also include an attorney sending an employer a demand letter on their client’s behalf after alleged workplace sexual harassment.
The SOA does not cover agreements entered after sexual harassment or abuse charges are made. Nonetheless, it addresses the unequal bargaining position between new employees and their employers and eliminates contract restrictions that can impact those employees’ legal rights later.
Victims of workplace sexual abuse or harassment can seek assistance on pursuing compensation and other legal relief. An attorney can advise them on their options and pursue their rights.