A nondisclosure agreement is something that an employee signs saying that they won’t talk about their work experience after they leave the company. They have to keep the things that they know about that business secret, and they’re legally bound to do so. They could face action if they violate the agreement and cause the company financial harm.
These NDAs are often used simply to protect the business and the intellectual property that is owned by that business. The owner of the company knows that they have to train their employees and give them confidential information to do their job, but they don’t want that information to get to the competition if the employee leaves. The nondisclosure agreement simply states that the employee is allowed to seek employment elsewhere – making it far different from a non-compete agreement – but they cannot pass that confidential information on.
But what about a case of sexual harassment? If an employee claims that they have been harassed, could a company owner simply have them sign a nondisclosure agreement so they can’t talk about it after the fact? Would this keep the behavior a secret so that it doesn’t impact the company’s reputation?
A recent law changed this loophole
This is something that companies used to do, but the Speak Out Act was recently passed by the House of Representatives. This means that it is going to move on to President Biden to become law.
Under this new law, NDAs are no longer allowed to prohibit people from talking about abuse or harassment of a sexual nature that they may have experienced on the job. This doesn’t mean that the employee can’t be bound by an NDA or that the company can’t use one. But it changes the focus to ensure that this NDA is strictly written to protect intellectual property and other things that are important to that business. It is not supposed to silence employees who have experienced harassment.
It’s always important to understand how laws are changing and exactly what rights and obligations you have under them.