'Employers can't insulate themselves…simply through using NDAs or confidentiality agreements'
Employers are under escalating pressure to strengthen policies against sexual misconduct in the workplace, following the passage of two new laws: one that opens a door to historic misconduct claims and another attacking the use of non-disclosure agreements to stifle such accusations.
“Expect an uptick in these types of claims,” says Sarah Sepasi, managing attorney at Los Angeles-based law firm Sepasi Legal, P.C.
“Employers can’t insulate themselves against these types of claims simply through using NDAs or confidentiality agreements. To protect themselves, employers should implement strong policies to monitor forms of sexual misconduct in the workplace.”
The impact of the #MeToo movement continues to reverberate throughout the United States, with the latest fallout being a new California law that revives sexual assault claims and extends the statute of limitations for reporting them.
“Under AB 2777, California survivors will have an unprecedented window of opportunity to secure justice on their own terms for crimes such as rape, sexual assault, sexual abuse, sexual harassment and all other forms of sexual violence,” Sepasi told HRD.
The law, which went into effect at the start of 2023, provides a three-year window for survivors of sexual assault to file claims for financial compensation as a result of crimes which occurred on or after Jan. 1, 2009. That means sexual assault and abuse claims which would otherwise be barred by the statute of limitations are now eligible to be brought in civil court through December 31, 2026.
The law also creates a one-year revival window allowing a plaintiff to bring a claim for crimes involving cover-ups that would otherwise be barred because the statute of limitations expired. For such a claim to qualify, the plaintiff would have to allege the following:
Under the law, a “cover-up” is defined as a concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent or prevents information relating to a sexual assault from becoming public or being disclosed to the plaintiff, including, but not limited to, the use of nondisclosure agreements (NDAs) or confidentiality agreements.
As another byproduct of the #MeToo movement, President Joe Biden signed H.R. 4445 into law last year.
Commonly referred to as the #MeToo bill, the legislation not only prohibits employers from requiring mandatory arbitration of claims involving allegations of sexual harassment or sexual assault going forward, but also nullifies any existing policies or agreements that require those claims to be arbitrated.
As a result, Sepasi says that she had to remove any language pertaining to sexual harassment or sexual assault from arbitration agreements that she had written for clients. “The use of NDAs is a lot more discouraged now,” Sepasi says. “They’re also becoming more obsolete with respect to protecting non-competes.” (This year, the Federal Trade Commission has proposed banning non-compete clauses.)
More than 60 million American workers have arbitration agreements tucked into their employment contracts, according to the Economic Policy Institute.
Historically, businesses have favored the arbitration process, arguing that it’s less expensive and much faster for resolving disputes rather than going through courtroom proceedings. However, because the facts of an arbitration case usually don't become public, in cases of sexual harassment and sexual abuse, the accused can often switch places of employment or even remain at a company without any recourse.
In the wake of the #MeToo movement, there has been a decline in workplace sexual harassment charges that the U.S. Equal Employment Opportunity Commission (EEOC) has received.
In 2018, at the height of the movement, the EEOC received 7,609 charges, up 13.6% from the prior year. The amount of charges dropped ever so slightly in 2019 to 7,514, and then fell by 12% in 2020, perhaps as a result of people working from home during the COVID-19 pandemic. In 2021, it dropped by 15% to 5,581 – the fewest number of charges since at least 2014.
New York Democratic Sen. Kirsten Gillibrand introduced the #MeToo bill in 2017 with South Carolina Republican Sen. Lindsey Graham, and the legislation received rare bipartisan support in a divided Congress. Gillibrand said the law “will give survivors their day in court, allow them to discuss their cases publicly and end the days of institutional protection for harassers. It will help us fix a broken system that protects perpetrators and corporations and end the days of silencing survivors.”
