By: Zeth D. Hearld
On July 17, 2018, a bipartisan group in the House of Representatives introduced new legislation in an effort to deter and reduce workplace harassment in light of the #MeToo movement. The proposed legislation, entitled the “Ending the Monopoly of Power Over Workplace Harassment through Education and Reporting Act” or the “EMPOWER Act” includes public disclosure requirements for employers, bans the use of certain types of nondisclosure/non-disparagement agreements, and provides alternative options for reporting workplace harassment. The protections of the Empower Act would apply to job applicants and employees as well as independent contractors, interns, and volunteers.
Content of the Proposed Legislation
- Employer Obligations
The EMPOWER Act would make it an unlawful employment practice for employers to:
…enter into a contract or agreement with an employee or applicant, as a condition of employment, promotion, compensation, benefits . . . or as a term, condition, or privilege of employment, if that contract or agreement contains a non-disparagement or nondisclosure clause that covers workplace harassment…
In other words, the legislation would ban nondisclosure clauses in applications or employment contracts that cover sexual harassment or retaliation against employees for “reporting, resisting, opposing, or assisting in the investigation of workplace harassment.” However, the legislation would not apply to nondisclosure agreements that are included in separation agreements if the legal claims arose prior to the execution of the settlement agreement.
Notably, the Act would also create new reporting requirements for certain public companies related to workplace harassment settlements and judgments. The Act would require any employer that files a Form 10-K with the SEC to report the number of sexual harassment claims settled annually. Significantly, the Act would also require these employers to report whether any “judgments or awards (including through arbitration or administrative proceedings)” was entered against the company as well as the amount paid of the judgment, whether in whole or in part.
The Act would also prevent employers from receiving tax deductions for payments made due to harassment judgments or for attorneys’ fees related to workplace harassment litigation.
- Employee Reporting Options
The Act would create a new “tip-line” with the EEOC that would allow employees to confidentially report workplace harassment, sexual harassment, and sexual assault. The EEOC would operate the tip-line in addition to the agency’s standard, formal complaint process. Although confidential, the tip-line would not be anonymous. In addition, the operators of the tip-line would be required to educate callers on additional methods of reporting, including filing a formal charge with the EEOC. The EMPOWER Act would not change the EEOC’s current investigatory powers. Employees would still have the ability to file sexual harassment and retaliation charges with the EEOC regardless of use the new tip-line.
- EEOC Training
The Act also would require the EEOC to “provide for the development and dissemination of work-place training programs and information” regarding workplace harassment and sexual harassment. The new training would cover actions that constitute workplace harassment, the rights of individuals and how to report harassment, how bystanders can intervene or report witnessed harassment in the workplace, and methods of prevention for employers and managers.
The EMPOWER Act is a direct reaction to the #MeToo movement. Notably, reporting on the Harvey Weinstein scandal and the subsequent flood of revelations demonstrated how some employers have used nondisclosure and nondisparagement agreements to conceal inappropriate behaviors. These legal limitations prevented employees from speaking out and allowed hostile work environments to fly under the radar for extend periods. The Act mirrors several state laws that have banned nondisclosure agreements, such as California, New Jersey, New York, Pennsylvania, and Washington.
Employers should monitor the progress of the EMPOWER Act. While it not clear whether the proposed legislation will pass, it does have bipartisan support as well as the support of the general public. Similar bipartisan legislation was proposed in the Senate in June, but it has not had any traction and will likely be delayed due to the U.S. Supreme Court nomination process.
This article was written by Zeth D. Hearld, who is an employment attorney with Kitch Drutchas Wagner Valitutti & Sherbrook. He can be reached at firstname.lastname@example.org or at (313) 965-7846.
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