Over half a decade ago, the anti-sexual assault and women’s empowerment movements #MeToo and Time’s Up raised global awareness of widespread harassment and assault. Since then, federal and state legislatures have enacted new laws intended to protect women who speak up about experiences of sexual harassment assault at work. California has made significant strides, having passed 11 new anti-workplace harassment laws since #MeToo went viral.
Notable among the recently established Federal Laws is the Tax Cuts and Jobs Act (TCJA) of 2017, the Ending Forced Arbitration of Sexual Assault and Harassment Act of 2021, and the Speak Out Act of 2022.
Passed into law in 2017, the Tax Cut and Jobs Act (TCJA) amended the Internal Revenue Code, impacting tax deductions related to money used to settle legal disputes surrounding sexual harassment and abuse. Historically, employers were able to receive tax deductions on money spent settling legal claims. The TCJA makes it impossible for an employer to receive a tax deduction on money used to settle legal disputes surrounding sexual harassment and abuse in cases where a non-disclosure agreement is one of the terms of the settlement. In other words, if the employer wants the worker to stay quiet about what happened to them, the employer can’t take the tax deduction for the money spent to settle the case. Under the TCJA, an employer can receive a tax deduction used to settle legal disputes surrounding sexual harassment and abuse as long as no non-disclosure agreement is used.
In March 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Harassment Act of 2021 into law. This legislation allows employees to sue employers in court for sexual harassment and abuse claims, even if arbitration agreements were previously signed. It also permits class action lawsuits for such claims, even if the right to do so was waived in the arbitration agreement. In other words, victims of sexual assault or harassment cannot be forced to settle their claims in arbitration, even if they had previously signed an arbitration agreement. This legislation is a powerful step forward because arbitration cases happen behind closed doors; binding victims of sexual assault or harassment to arbitrate their claims effectively silenced the claimants. Now, all survivors of workplace sexual assault have the option to have their cases heard in court if they so choose.
A recent federal development is the proposed Speak Out Act (SOA), signed by President Biden in December of 2022. The SOA prohibits the enforcement of pre-dispute nondisclosure or non-disparagement clauses concerning sexual harassment or assault allegations. Notably, it only applies to agreements made before a dispute arises. If the parties enter into a nondisclosure or non-disparagement after the dispute or as part of the settlement, SOA does not apply, and the agreement is valid.
While the SOA has limitations, such as its exclusive focus on pre-dispute clauses, it signifies progress. It ensures that victims have a fair chance to make informed decisions about agreements restricting their ability to discuss unexpected workplace issues. The Act may pave the way for broader legislation, potentially encompassing various forms of discrimination beyond sexual harassment.
California has passed numerous laws since 2018 regarding workplace harassment. Notable among the recently established California laws is Assembly Bill 933, the Stand Together Against Non-Disclosure Act, and the Silence No More Act.
In 2023, the California Legislature passed Assembly Bill 933 (AB 933), which expands the scope of privileged speech to explicitly cover communications related to information about incidents involving sexual assault, harassment, or discrimination. AB 933 introduces California Civil Code § 47.1, designating a communication as privileged if made “without malice, regarding an incident of sexual assault, harassment, or discrimination.” The privilege applies when the statement maker had a reasonable basis to file a complaint for such incidents, irrespective of whether a formal complaint was submitted. Under AB 933, if the defendant of a defamation case regarding factual speech related to sexual assault prevails, the defendant will be able to attorney’s fees, and damages including punitive damages. This legislation is important as it protects and encourages legitimate complaints of sexual harassment and assault by eliminating the threat of retaliatory defamation claims.
The Stand Together Against Non-Disclosure Act (STAND), passed in 2018 in response to the #MeToo movement, prohibits the use of Non-Disclosure Agreements in sexual harassment or assault case settlements. Under STAND, in California, NDAs preventing disclosure of factual information about sexual assault, harassment, or workplace discrimination based on sex, are unlawful. While SB 820 was incredibly important, it had limitations, including the fact that it only addressed sex-based harassment and discrimination.
SB-331, passed into law in 2021 builds on the 2018 Stand Together Against Non-Disclosure Act (SB 820) and addresses its gaps. The Silence No More Act prohibits the use of non-disclosure clauses in settlements involving workplace harassment or discrimination against any protected groups, including race, color, national origin, religion, age, sex, sexual orientation, and disability. The STAND and Silence No More acts are important in giving survivors of harassment and abuse the right to speak about their experiences, and preventing employers from shielding themselves and bad actors from public accountability.