In 2022, President Biden signed two new laws into place that could affect the way sexual harassment or assault allegations are handled in the workplace. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “EFASASH”) and the Speak Out Act each place limits on mandatory arbitration, non-disclosure, and non-disparagement agreements as applied to sexual harassment and sexual assault claims.
These new laws could change the way a company chooses to draft its employment agreements or similar documents.
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021
On March 3, 2022, President Biden signed EFASASH into law. EFASASH states that even if an employee signed an arbitration clause in an employment agreement or similar document, they can still bring a sexual harassment or sexual assault claim to court and bypass arbitration entirely. EFASASH became effective immediately, and applies retroactively to agreements signed before its effective date.
EFASASH did not outlaw arbitration of sexual harassment or sexual assault claims entirely. Employees can still choose to use the arbitration process, or take their claims to court or the EEOC, rather than being forced into arbitration.
The Speak Out Act
On December 7, 2022, President Biden signed the Speak Out Act. The Speak Out Act applies to non-disclosure and non-disparagement clauses in documents such as employment agreements or handbooks. This law prohibits the enforcement of these clauses as applied to a sexual harassment or sexual assault claim. In other words, companies cannot use these clauses to prevent employees from talking about sexual harassment or sexual assault in the workplace.
The Speak Out Act does not prohibit employers generally from having non-disclosure and non‑disparagement clauses in their employment agreements; rather, it only the prevents the application of those clauses to sexual harassment and sexual assault claims.
Vermont Law and Sexual Harassment Claims
Both EDASASH and the Speak Out Act are federal laws. Vermont already prohibits mandatory arbitration of claims such as sexual harassment or sexual assault. Under Vermont law, if an employee wishes to raise a claim involving an alleged violation of their constitutional or civil rights (like a sexual harassment/sex discrimination claim), then that employee can move straight to court and avoid mandatory arbitration. Vermont law requires that this language is explicitly included in any arbitration agreements.
In Vermont, employment agreements may not prohibit an employee from opposing, disclosing, reporting, or participating in an investigation of sexual harassment. Vermont also places limits on sexual harassment settlements that include non-disclosure and non-disparagement agreements. A sexual harassment settlement must explicitly state that the claimant is not prohibited from lodging a complaint of sexual harassment with the Attorney General, the state prosecutor, or state and federal agencies. It also must state that the employee is allowed to participate in an investigation conducted by those entities with respect to sexual harassment; or testifying in court or at an arbitration related to a claim of sexual harassment.
What Should Employers Do?
In order to be compliant with both state and federal law, companies should consider reviewing and revising their employment agreements to clarify that mandatory arbitration does not apply to claims relating to sexual harassment and sexual assault (or, if the company is located in Vermont, constitutional or civil rights claims). If a company has its employees sign non-disclosure or non-disparagement agreements at the beginning of employment, then it should consider revising those documents to be sure that they include language making exceptions for claims regarding sexual harassment or sexual assault, in order to comply with the Speak Out Act.
Please contact Heather Hammond (hhammond@gravelshea.com) at Gravel & Shea PC if you have questions or would like assistance with your contracts.
