As featured in “Conduct Detrimental,” the sports law intersection.
The Masters is around the corner, but the media is not buzzing about who is favored to win the tradition unlike any other. Rather, attention is focused on litigation off the course involving Tiger Woods and his ex-girlfriend, Erica Herman.
Herman is seeking $30 million in damages against the Jupiter Island Irrevocable Homestead Trust stemming from her eviction from Woods’ home. Herman claims the eviction was a breach of an 11-year “oral tenancy agreement.”[i] Woods denies that he negotiated an oral tenancy agreement with. Herman.[ii]
In a lawsuit associated with the tenancy lawsuit, Herman is attempting to nullify a non-disclosure agreement (NDA) with Woods. Herman is relying on the recently enacted federal Speak Out Act (“Act”)[iii] to nullify the NDA. The Speak Out Act was signed into law by President Biden on December 7, 2022, to prohibit the silencing of victims of sexual harassment and sexual assault.
Given the newness of the Act, there are misconceptions about what the Act actually prohibits. Here is a FAQ that explains what the Act covers and what it does not.
Q: What Does the Speak Out Act Prohibit?
The law renders unenforceable non-disclosure and non-disparagement clauses related to allegations of sexual assault and/or sexual harassment that are entered into “before the dispute arises.” The text of Speak Out Act is surprisingly limited.
Specifically, the text of the Act states in relevant part:
With respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated Federal, Tribal, or State law. (emphasis added).
This means that if an NDA or non-disparagement clause is so broad that it silences claims of sexual harassment or sexual assault before a claim of sexual harassment or sexual assault has been alleged, the clauses would be unenforceable.
Q: What Claims are Not Prohibited by the Act?
The phrase “before the dispute arises” has great significance. It appears that Congress did not intend to silence claims that have already been asserted and then subjected to a nondisclosure or non-disparagement clause. In other words, it does not preclude an employer or other party from enforcing an NDA or non-disparagement clause in a settlement agreement if allegations of sexual harassment or sexual assault were raised before the agreement was signed.
In sum, timing is everything.
Q: Why was the Act Passed?
The Act contains Congress’s findings that nondisclosure and non-disparagement provisions in agreements between employers and current, former, and prospective employees, and independent contractors, and between providers of goods and services and consumers, can perpetuate illegal conduct by silencing those who are survivors of illegal sexual harassment and assault or illegal retaliation, or have knowledge of such conduct while shielding perpetrators and enabling them to continue their abuse.
According to Congress, prohibiting nondisclosure and non-disparagement clauses under the Act will empower survivors to come forward, hold perpetrators accountable for abuse, improve transparency around illegal conduct, enable the pursuit of justice, and make workplaces safer and more productive for everyone.
The Act complements the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which bars pre-dispute arbitration agreements and joint-action waivers covering sexual assault or sexual harassment disputes.
Q: Does the Act Prohibit the Protection of Trade Secrets and Confidential Information?
No. The Act provides that nothing in the Act prohibits an employer and an employee from protecting trade secrets or proprietary information.
Q: Are the State Laws Similar to the Act?
A number of states have passed laws addressing allegations of sexual assault and/or harassment. California, for example, has a much broader law[iv] that prohibits employers from using confidentiality provisions in agreements involving claims for sexual assault, sexual harassment, and sex discrimination as well as claims under the Fair Employment and Housing Act including race, religion, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, familial status, sex, gender, gender identity, gender expression, age, sexual orientation, and veteran or military status.
Take Aways
The #metoo movement has led to the passing of several laws designed to protect victims of sexual harassment and assault and empower them to make public illegal conduct. The Speak Out Act continues this trend and nullifies non-disclosure and non-disparagement clauses that bar the disclosure of sexual assault and sexual harassment claims that have not yet arisen.
It will be interesting to follow the drama of the Woods’ litigation and see if the Speak Out Act is found to be applicable to his NDA.
The implications of the Speak Out Act, however, are much broader than the Woods’ litigation. Employers and those who wish to enforce NDA’s and non-disparagement clauses should review their existing agreements and make sure that they include appropriate carve-outs and comply with the Act.
Sources: [i] Brendan Quinn, Tiger Woods Attorneys Say Golfer’s Ex, Seeking $30 Million in Lawsuit, Had No Tenancy Agreement, The Athletic (Mar. 10, 2023), https://theathletic.com/4296415/2023/03/10/tiger-woods-girlfriend-lawsuit-tenancy/; Alex Miceli, Tiger Wood’s Ex-Girlfriend, Erica Herman, Asks Court to Resolve Dispute Over NDA, Sports Illustrated (Mar. 8 2023 4:26 PM EST), https://web.archive.org/web/20230327124025/https://www.si.com/golf/news/tiger-woods-girlfriend-erica-herman-asks-court-to-resolve-dispute-over-nda. [ii] For a solid summary of the lawsuit check out an article by John Nucci, Chief Golf Correspondent for Conduct Detrimental “Tiger Woods, NDA’s and Lawsuits: A Legal Breakdown”[ii] and the Conduct Detrimental podcast episode[ii] discussing the same. [iii] Public Law No: 117-224 (12/07/2022) https://www.congress.gov/bill/117th-congress/senate-bill/4524/text. [iv] S. 331, 117th Cong. (2021) (approved by Governor Oct. 7, 2021, filed with Secretary of State Oct. 7, 2021) (accessible at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB331).
Kenneth Winkler, a shareholder at Berman Fink Van Horn, helps employers navigate the employment laws and regulations that govern the workplace.
