What Businesses Need to Know and How to Prepare

In an era where transparency and accountability are more important than ever, the Speak Out Act, signed into law in December 2022, introduces new regulations that reshape how businesses handle certain legal protections around workplace misconduct. Designed to empower individuals who experience sexual harassment or assault, the Act restricts the enforceability of pre-dispute nondisclosure agreements (NDAs) and nondisparagement clauses related to such claims. This legislation brings both legal and cultural implications for businesses across industries, making it essential for leaders to understand its requirements and implications.

Here, I’ll explain the Speak Out Act, its potential impacts on businesses, and actionable steps companies can take to comply with the law and maintain a workplace environment rooted in trust and respect.

What is the Speak Out Act?

The Speak Out Act prohibits employers from enforcing NDAs and nondisparagement agreements signed before any dispute arises in cases involving sexual harassment or assault. Traditionally, companies have used NDAs in employment contracts to protect its reputation and confidential information. However, pre-dispute NDAs have often stifled survivors' ability to speak out about their experiences and seek accountability, particularly in sexual harassment cases. With this legislation, individuals are now free to discuss alleged harassment or assault incidents even if they previously signed an agreement that would have restricted such disclosures.

It’s important to note that this law does not invalidate all NDAs or nondisparagement agreements. NDAs signed after a dispute (such as in settlement agreements) are still enforceable, provided both parties agree to confidentiality terms voluntarily. The Speak Out Act applies specifically to pre-dispute agreements, changing the landscape for workplace contracts going forward.

The Impact on Businesses

The Speak Out Act brings legal considerations and cultural shifts for businesses. Traditionally, NDAs have been used as a blanket approach to protect organizations from reputational damage. Now, companies need to reassess their strategies for managing workplace conduct to ensure compliance with this law and create a safe, supportive environment for employees. This requires fostering a proactive culture that meets legal obligations and enhances employee trust.

From a compliance perspective, businesses must review existing employment contracts and HR policies to ensure they align with the Act’s provisions. This law’s introduction also creates a heightened awareness of the need for fair and transparent workplace policies, further emphasizing the importance of a proactive approach to harassment prevention and response. Failure to adapt could lead to increased reputational risk, legal challenges, and reduced employee morale and trust.

Practical Steps to Ensure Compliance and Foster a Safe Workplace

To maintain compliance with the Speak Out Act and reinforce a culture of trust and safety, consider implementing the following strategies:

Update Your Policies and Employment Agreements

Businesses should review all employment contracts, handbooks, and policies to ensure compliance with the Speak Out Act. Any pre-dispute nondisclosure or nondisparagement language tied to potential harassment or assault cases should be removed or reworded to reflect the new legal requirements. Legal counsel may be beneficial in ensuring that all documents align with the current standards while still providing the necessary protections for your organization’s confidential information.

Implement Effective Annual Training

Annual, well-structured training for both managers and employees is crucial. These training sessions should go beyond simply defining harassment and instead provide concrete examples of unacceptable behavior, explain reporting mechanisms, and outline steps the organization will take in response to misconduct. Managers, in particular, need training that covers both how to identify early signs of harassment and the correct procedures for responding to complaints. Regular training reinforces the organization’s commitment to a safe and inclusive workplace and equips employees with the tools to identify and report harassment.

Develop a Comprehensive Complaint System

Creating a robust, accessible complaint system is key to building a safe workplace environment. Employees should feel confident that they can report issues without fear of retaliation. Consider implementing multiple reporting channels, such as an online portal, a hotline, or direct access to HR representatives. This can help ensure that employees feel supported, secure, and heard. Transparency in reporting processes builds trust and reinforces a culture where issues are addressed promptly and professionally.

Maintain Thorough Documentation and Investigation Protocols

Every complaint of harassment or misconduct should be met with a thorough, well-documented investigation. Ensure that all investigative procedures are clearly outlined and consistently followed, creating a reliable process that employees can trust. Documentation should capture all details and steps taken throughout an investigation, providing an objective record that demonstrates your organization’s commitment to handling complaints seriously and effectively.

For assistance in reviewing your current processes or to explore how empathiHR can assist your company in mitigating its risks to claims of harassment & discrimination, contact 866-240-6618 or hello@empathihr.com