The Utah state legislature passed a bill on Friday that makes confidentiality clauses related to sexual assault and sexual harassment unenforceable.
HB55, sponsored by Rep. Kera Birkeland, passed in Utah’s House and Senate with amendments this week. The next step is for the bill to be enrolled to be prepared in final form and then sent to the governor to sign, veto, or allow it to become law without his signature.
It’s an important development in Utah, a state where some women have reported experiencing a culture of sexism and even harassment at companies they’ve worked at. Nationwide, confidentiality clauses, often in the form of nondisclosure and non-disparagement agreements, can be commonplace and keep employees from reporting cases of sexual harassment or assault at their company.
In Utah’s House, the bill with amendments from the Senate passed Friday with 71 representatives in favor and 4 representatives absent or not voting. In the state’s Senate, it passed Wednesday with 24 senators in favor and 5 senators absent or not voting.
If Utah’s governor signs the bill into law, it will apply to confidentiality clauses in Utah that were in effect from January 1, 2023, onward.
“As a woman speaking on behalf of women, I hope it brings upon Utah future change for the better to have a better workplace,” said Kimberly Bernhardt, an advocate with the group A Bolder Way Forward, who championed the bill and testified to the House Judiciary Committee in support of it.
NDAs in the workplace
Advocates from A Bolder Way Forward said it can be tough to gauge exactly how widespread these types of confidentiality agreements are.
“Nondisclosure agreements tend to make people not talk about anything,” Bernhardt said.
“If it happens to you outside of work, people can talk about it all they want,” she added. “Normal citizens have legal remedy for defamation if it hurts their reputation outside of employment. Within employment, there’s just a different set of laws.”
Only about 11% of respondents agreed or strongly agreed that most organizations in Utah “would appropriately handle a sexual harassment report,” according to a statewide study conducted by the Utah Women & Leadership Project. And nationwide, more than 2 out of 3 sexual assaults go unreported to the police, according to RAINN.
The US Congress passed the Speak Now Act in 2022, which prohibits the enforceability of a nondisclosure or nondisparagement clause agreed to before a dispute that arises involving sexual assault or harassment. But this federal law doesn’t apply to NDAs signed as a result of such disputes.
The high cost of legal action
The Utah bill also states that someone who attempts to enforce a confidentiality clause may be liable for costs and attorney fees under certain conditions.
According to the bill, an employer that tries to enforce a confidentiality clause would be liable for all costs, including “reasonable attorney fees,” resulting from legal action to enforce the clause and is not entitled to monetary damages for breaching that clause.
“In most sexual harassment cases, a company is fully equipped with lawyers at their beck and call,” Bernhardt said. “Regular people and employees don’t just have a lawyer they can dial for help. When individuals report sexual harassment, a lot of them don’t have attorneys. If a victim does get an attorney, it takes several weeks for someone to take their case.”
Since many people may not be able to afford legal counsel, victims often end up settling.
“For too many people, the best course of action is to keep their mouth shut and leave the company,” said Utah State University business professor Susan Madsen, who helped launch A Bolder Way Forward. “They just leave because they’re not believed. They don’t believe they’ll be supported in their companies. It shouldn’t be the best course of action for anyone.”
Bernhardt said that the biggest pushback was in regard to how this bill would impact settlement agreements. It led to an amendment that states an employee may withdraw from a settlement agreement within three business days after they agreed to that settlement with a confidentiality clause regarding sexual misconduct.
“There’s a lot of bullying tactics that go into the negotiations of these types of settlements,” Bernhardt said. “A lot of times, victims are left with a small window of time to accept an offer.”
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