If you think you can keep an employee’s sexual harassment and sexual assault claims quiet through the use of arbitration and non-disclosure/non-disparagement agreements signed at the outset of her or his employment, you better think again.
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act and The Speak Out Act render unenforceable a) any agreements requiring arbitration of future sexual harassment and sexual assault claims in the workplace and b) any non-disclosure or non-disparagement agreements concerning those same types of claims. The concern addressed by the two laws is that “by silencing those who are survivors of illegal sexual harassment and assault or illegal retaliation, or have knowledge of such conduct,” perpetrators are shielded and in fact enabled to continue their abuse.
So how does this play out? If your employees sign agreements at the outset of their employment that contain arbitration clauses, those clauses will be unenforceable as to any future sexual harassment or sexual assault claims (whether individual or class-based). If your employees sign confidentiality agreements at the outset that purportedly prevent them from discussing any claims in general that arise during their employment, those agreements will be unenforceable as to any sexual harassment or sexual assault claims after the employee signs.
Post-claim/post-dispute agreements are not barred, such as settlement agreements that are entered into after an EEOC charge or a lawsuit is filed. However, there’s always the possibility that some other law (like the National Labor Relations Act) might invalidate an overly broad non-disparagement or non-disclosure clause. Another question that remains — what happens when a case involves a claim for sexual harassment and (for instance) a separate claim for an FMLA violation? If a pre-claim agreement to arbitrate exists, do the parties arbitrate the FMLA claim, but litigate the sexual harassment claim in court? The answer may come down to a court deciding whether there is some factual tie between the two claims.
As the end of the year approaches, it is a good time for businesses to look at their handbooks and employee agreements, and in light of this new federal legislation, potentially modify their expectations when it comes to quietly handling these types of claims.