Confidentiality agreements in the case of sexual harassment may soon be curbed, as President Biden signs new legislation limiting their use.
Confidentiality agreements in business are supposed to protect the practices that businesses don’t want their competitors to know. But all too often, especially in the past thirty years, they’ve been used to gag employees who have suffered at the hands of employers and coworkers.
“Instead of protecting trade secrets as it was initially intended, abusive use of NDAs silence employees and covers up serious and systemic misconduct,” said Senator Kirsten Gillibrand (D – New York).
Gillibrand and Senator Lindsey Graham (R – South Caroline) worked together to propose the new measure, called the Speak Out Act. It received heavily bipartisan support, rare in the current political climate. It was unanimous in the Senate.
The Speak Out Act bans the use of blanket confidentiality agreements, also known as NDAs. Many employers require the signing of a blanket NDA as a condition of employment, covering not only sensitive industry information but any in-house dispute or arbitration, such as sexual harassment cases. All such existing NDAs are now unenforceable, with the signing of this law.
It also bans all NDAs between providers of goods and services and their customers. These are not common in most fields, but are often seen in places where there is a high risk of abuse, such as massage parlors, senior living facilities, and long-term care facilities.
On top of these, any NDA concerning a dispute between an individual and a business, signed before the dispute takes place, is no longer enforceable.
“Today, 1 in 3 workers is subjected to NDAs that hide sexual misconduct in order to protect a business’s reputation,” the lawmakers said. “We’re taking the gag off of survivors and pushing businesses to create safer work environments.”