Employment Law Lessons: Teeing up the Speak Out Act edition
It’s not every day you find a story at the intersection of celebrity gossip, sports news, and employment law. The recent action by Tiger Woods’ former girlfriend, Erica Herman, seeking to be released from a non-disclosure agreement (NDA) and arbitration requirement is precisely that story - just right for an employment law blog, Golf Digest, or the Daily Mail. This IRL drama provides an opportunity to take a closer look at the Speak Out Act and the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFA).
The employment laws in play
To truly understand this drama, we’ll need a quick re-fresh on these two 2022 federal laws borne primarily out of the #MeToo movement and intended to limit contract terms that stifle the disclosure of sexual assault and harassment in the workplace and elsewhere.
The Speak Out Act
Employers will recall that in a year-end legislative push President Biden signed the Speak Out Act on December 7, 2022.
As its name suggests, the Speak Out Act is intended to make it easier for employees to speak out against sexual harassment or assault in the workplace by limiting the scope of non-disclosure and non-disparagement agreements. Specifically, the Speak Out Act prohibits enforcement of pre-dispute non-disclosure and non-disparagement agreements related to sexual harassment or sexual assault. While the law applies to such provisions in any agreement, in the employment context it means that employers cannot “gag” employees by requiring them to sign agreements not to talk about sexual harassment or sexual assault allegations before such a concern or dispute even exists.
Although the parameters of this new law are generally untested, it is understood to allow employers to include enforceable non-disclosure and non-disparagement clauses in settlement agreements resolving allegations of sexual harassment and assault. This preserves an important tool for both employees and employers in settling such claims.
Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act
Effective March 3, 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFA) prohibits pre-dispute agreements or waivers requiring mandatory arbitration of sexual harassment or sexual assault claims. Notably, an employer and employee can still mutually agree to arbitrate such disputes after the events giving rise to the claims have occurred.
The Tiger Woods/Erica Herman dispute
Now, let’s tee up the real drama. During a nasty breakup, Woods apparently locked Herman out of the house (owned by Wood’s trust) that they had shared for a number of years. Herman initially sued the trust for violation of an oral tenancy agreement alleging a violation of the Florida Residential Landlord Tenant Act (that’s a story for my real estate colleagues to tell). Woods’ lawyers sought to dismiss Herman’s claims against the Trust and later asked the court to move the matter to arbitration under the terms of a 2017 NDA signed by Herman and Woods at the beginning of their relationship.
Seeking a way out of arbitration, on March 6, 2023, Herman filed a declaratory action against Woods asking the court to confirm that the NDA and the arbitration requirement in the NDA are “invalid and enforceable” under the Speak Out Act and the EFA.
Readers may wonder how the Speak Out Act and the EFA factor into the Woods/ Herman dispute that appears to involve an intimate personal relationship, not an employment relationship. Well, as Herman alleges in her complaint, she had a “long relationship” with Woods that was both professional and personal. In other words, she alleges that she was Woods’ girlfriend and his employee. In any event, while NDAs and arbitration requirements are typically found in employment-related agreements, both the Speak Out Act and the EFA are broadly drafted to apply to any type of pre-dispute agreement. Given the broad scope of these acts, the court may avoid a certain sand trap trying to sort out of what was “personal” activity and what was part of the “professional” employment relationship.
Herman’s declaratory action is newly filed, so it will take some time to see how it plays out in court. However, the allegations themselves create some takeaways for employers.
- Take these new laws into consideration. The EFA and the Speak Out Act put new limits on relatively common provisions found in template employment documents often signed at the time of hire. Because these laws were passed with relatively little fanfare last year, employers may not have taken the time to consider their implications or, significantly, to have updated template agreements.
- Review and revise existing agreements. To comply with the Speak Out Act, employers will want to review and revise standard documents that are likely to contain broad non-disclosure and/or non-disparagement provisions, such as employment agreements, confidentiality agreements, and employee handbooks and policies. Employers who use template separation agreements should also consult with employment counsel to review whether modifications are necessary to comply with the new law. Similarly, employers that require arbitration of employment claims should review agreements to assess and limit the scope of arbitrable claims to exclude sexual assault and sexual harassment.
On a more pragmatic note, unless you’re interested in having an employment dispute featured in the Daily Mail, think twice before establishing a “personal” relationship with an employee or a “professional” relationship with your romantic partner.
The McDonald Hopkins Labor & Employment team is available to discuss the Speak Out Act and the EFA and to assist employers is reviewing and revising agreements to comply with these laws.