Congress has just passed a bipartisan bill to limit nondisclosure agreements. The Speak Out Act, having cleared both the Senate and House, is expected to be signed into law by President Biden. And, as Axios reports, it “comes slightly more than five years after the resurgence of #MeToo captured the nation's attention and demonstrates that social movement's long reach.”
The bill, which limits NDAs as a means to silence survivors of workplace sexual misconduct, also is a culmination of sorts for Associate Professor of Management and Organization Evan Starr at the University of Maryland’s Robert H. Smith School of Business.
Starr collaborated with former Fox News hosts Gretchen Carlson (who sued and later settled with her then-boss Roger Ailes regarding her own NDA) and Julie Roginsky in advocating for the bill. “They pushed this bill through Congress,” he says. “We wrote a policy brief about NDAs earlier this year.”
The effort emanated in part from Starr’s working paper – uniquely probing this issue -- with co-authors Jason Sockin (U.S. Treasury) and Aaron Sojourner (Upjohn Institute). They explained their findings last fall in a Washington Post op-ed, “What happens when states limit nondisclosure agreements? Employees start to dish,” including:
Policymakers should reconsider their tolerance of broad NDAs and nondisparagement clauses. While narrow NDAs have legitimate purposes, such as protecting trade secrets, allowing employers to use NDAs to prevent workers from later speaking honestly about their work experiences has little to no economic benefit to society. Indeed, it makes the job market more inefficient, by concealing bad behavior.
Though the new bill applies only to agreements signed before a dispute arises, Starr says the legislation would curb damage from conduct like that of Harvey Weinstein. “His use of NDAs perpetuated sexual harassment by concealing information to prospective employees about what had happened to predecessors.”
Starr’s working paper spurring the new legislation also was cited earlier this year in the Biden Administration’s “The State of Labor Market Competition.” The report cited and drew from 10 papers on noncompete and non-disclosure agreements by Starr.
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