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Employment Law

Secret Santa’s Clauses No Longer Work

By December 15, 2022No Comments

Why workplace romantic relationships are not so secret (and can’t be kept secret) this holiday season

Anyone having an affair or seeking one in the workplace?  Be careful about how much holiday conviviality you engage in.  Thanks to new laws passed this last year by Congress, it is more difficult for employers to keep such arrangements confidential. 

First, in February of this year, Congress passed the Ending Sexual Assault and Forced Arbitration Act which prohibits enforcement of pre-dispute arbitration agreements in cases involving allegations of sexual harassment or assault.  Arbitration agreements with employees have been attractive to employers as a means of keeping messy and shocking allegations such as sexual harassment and assault allegations out of the public eye.  If such matters must now be taken to court, it is public record and viewable to all.  Beyond the considerable tangible costs of litigation, this negative publicity can do considerable damage to a business’s reputation and goodwill in the #metoo era. 

Next, on December 7th, President Biden signed into law the Speak Out Act which prohibits the use of non-disclosure and non-disparagement provisions to pre-dispute claims of sexual harassment or assault.  While this law does not prohibit the use of NDA’s or non-disparagement in post-dispute settlement agreements, it does prevent employers from being able to hush up complaints of sexual harassment and assault at the initial stages of a claim.  The term “dispute” is not adequately defined in the statute so it is unclear whether you can get an enforceable NDA at the internal complaint stage, the administrative charge stage or only after litigation is filed.  However, the law applies broadly to current, former and prospective employees as well as independent contractors. 

For example, if a business owner or manager is involved in a sexual relationship with a subordinate employee, the business cannot require the subordinate to keep the relationship confidential with a pre-dispute NDA, arbitration agreement or non-disparagement clause.  If the romantic relationship heads towards the South Pole, there is no enforceable way to keep such complaints from being publicized absent reaching a formal settlement agreement post-dispute.  So the best gift this holiday season may be to avoid spreading too much holiday cheer.