Utah Bill Would Limit Enforceability of NDAs Related to Sexual Assault, Harassment

By Erika Paulus posted 02-16-2024 09:13 AM


Utah lawmakers are about a month into their 2024 legislative session, and one of the bills introduced so far that could impact employers is House Bill 55. If it passes, HB 55 will limit the enforceability of employers having nondisclosure and nondisparagement clauses related to sexual assault and sexual harassment in the hopes of having fewer instances of sexual assault or harassment claims 

This probably sounds familiar to most employers, and that’s because in 2022 Congress passed the federal Speak Out Act, which prohibits employers from entering into agreements with employees that contain nondisclosure or nondisparagement clauses related to sexual assault and/or sexual harassment before such disputes arise.  

Utah’s bill would act in unison with the Speak Out Act, but it would also create some changes for Utah employers. If an employer and employee enter into a settlement agreement that contains a confidentiality clause regarding sexual misconduct, the employee may, within three business days of signing the agreement, withdraw their agreement. Thus, if enacted, this would mean employers should not provide payment for signing such a settlement agreement until three business days after the agreement has been signed by the employee. If passed, the legislation would apply retroactively to January 1, 2023, so any nondisclosure or nondisparagement clauses related to sexual assault and/or harassment entered into after that time would be subject to HB 55. 

The bill has passed the state House, and the state Senate made amendments to the bill and sent it back to the House. Employers Council will continue to monitor the bill, and Utah employers should be prepared in case it passes. Employers can take proactive steps by gathering agreements entered into after January 1, 2023, that contained nondisparagement and/or nondisclosure clauses related to sexual harassment and/or sexual assault and by being prepared to possibly amend them to remove the provisions that are not in accordance with HB 55. If you have any questions, please email our Member Experience Team.