A confidentiality or nondisparagement clause signed at hiring won’t stop an employee from talking about sexual harassment. The federal Speak Out Act, 42 U.S.C. section 19403(a), says no such clause “agreed to before the dispute arises shall be judicially enforceable” in a sexual assault or sexual harassment dispute. California law reaches further, covering all unlawful workplace conduct and requiring specific carve-out language. An employer that tries to enforce an old clause can add a claim against itself.
What does the Speak Out Act do?
It limits enforcement, not drafting. Section 19403(a) applies “With respect to a sexual assault dispute or sexual harassment dispute,” and bars judicial enforcement of pre-dispute nondisclosure and nondisparagement clauses “in instances in which conduct is alleged to have violated Federal, Tribal, or State law.”
The definitions are broad. Under section 19402, a nondisclosure clause is any provision requiring the parties “not to disclose or discuss conduct, the existence of a settlement involving conduct, or information covered by the terms and conditions of the contract.” A “sexual harassment dispute” is one “relating to conduct that is alleged to constitute sexual harassment.” An allegation is enough to trigger the rule.
When does the federal law apply?
To claims filed on or after its enactment. 42 U.S.C. section 19404 says the chapter applies “with respect to a claim that is filed under Federal, State, or Tribal law on or after December 7, 2022.” The timing turns on when the claim was filed, not when the agreement was signed, so older onboarding agreements are covered for new claims.
The Act keeps two employer protections. Section 19403(d) says it doesn’t “prohibit an employer and an employee from protecting trade secrets or proprietary information.” And it applies only to clauses agreed to before the dispute, so a confidentiality term in a settlement of an existing claim is outside it.
How is California law different?
Broader in scope and stricter on drafting. Government Code section 12964.5(a) makes it an unlawful employment practice to require, as a condition of employment or for a raise or bonus, a nondisparagement agreement or other document “to the extent it has the purpose or effect of denying the employee the right to disclose information about unlawful acts in the workplace.”
That reaches discrimination, retaliation, and wage violations, not only sexual harassment. And any clause restricting disclosure of workplace conditions must include, in substantial form, this language: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
Section 12964.5(a)(2) says a noncompliant agreement “is contrary to public policy and shall be unenforceable.”
What about separation and settlement agreements?
Separate rules apply. Section 12964.5(b) bars separation agreements from prohibiting “the disclosure of information about unlawful acts in the workplace,” requires the same carve-out, and requires notice of the right to consult an attorney with at least five business days to do so.
Negotiated settlements of filed claims are treated differently. Subdivision (d) excludes “a negotiated settlement agreement to resolve an underlying claim” filed in court, with an agency, in arbitration, or “through an employer’s internal complaint process.” Settlement confidentiality has its own limits elsewhere in California law, which counsel should check for each settlement. The firm covers separation agreements in a post on California severance agreements.
What’s the risk of trying to enforce an old clause?
A new claim. Threatening an employee with breach of a confidentiality clause after they’ve complained about harassment looks like retaliation, and a California court won’t enforce the clause anyway. A demand letter citing the clause can become an exhibit in the employee’s case.
The stronger course is to fix the documents before a dispute and, once a claim arrives, leave the old clause alone unless counsel has confirmed it protects only trade secrets or proprietary information.
Federal and California rules at a glance
| Issue | Speak Out Act | Gov. Code 12964.5 |
|---|---|---|
| Conduct covered | Sexual assault and sexual harassment | Any unlawful acts in the workplace |
| Agreements covered | Pre-dispute NDAs and nondisparagement clauses | Conditions of employment, raises, bonuses, separation agreements |
| Effect | Not judicially enforceable | Unenforceable, and requiring it is an unlawful practice |
| Required language | None | Specified carve-out, in substantial form |
| Trade secrets | Still protectable | Still protectable if not about unlawful acts |
The firm’s page on harassment claim defense for California employers describes its work defending employers against harassment and discrimination claims.
When a harassment claim involves a confidentiality clause
- Preserve every version of the offer letter, confidentiality agreement, and handbook acknowledgment the employee signed, with dates.
- Calendar the deadline on the demand, CRD complaint, or lawsuit, and give notice to the EPLI carrier as the policy requires.
- Identify the managers and HR staff involved, and make sure no one contacts the employee about the clause or treats them differently.
- Pull the complaint records and the investigation file for the underlying allegations.
- Talk to a lawyer before sending any letter that mentions confidentiality or nondisparagement obligations.
Pre-dispute NDA questions from employers
Do we need to rewrite our onboarding agreements?
Most California employers should. Any clause restricting disclosure of workplace conditions needs the section 12964.5 carve-out language. Agreements used for employees in other states should also be checked against the Speak Out Act and local law.
Does the Speak Out Act affect arbitration agreements?
It addresses nondisclosure and nondisparagement clauses, not arbitration. Pre-dispute arbitration of sexual harassment claims is governed by a separate 2022 federal law, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act.
Can we still protect confidential business information?
Yes. Both the federal statute and California law preserve protection for trade secrets and proprietary information. The key is drafting the clause so it covers business information without reaching information about unlawful conduct.
Does the federal law preempt California’s rule?
No. Section 19403(b) lets states enforce laws that are “at least as protective of the right of an individual to speak freely.” California’s broader rule continues to apply.
If an employee’s harassment claim involves an NDA
If your company is facing a harassment or discrimination claim and the employee signed a confidentiality or nondisparagement agreement, the clause’s wording and timing decide whether it matters at all. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving harassment allegations and employment agreements. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The federal statutes are 42 U.S.C. sections 19402, 19403, and 19404. The California statute is Government Code section 12964.5.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.