NDAs and Forced Arbitration in Sexual Misconduct Cases

Two federal statutes limit what a contract signed in advance can do in a sexual harassment or sexual assault dispute. One lets the person alleging the conduct choose court over arbitration despite a predispute arbitration agreement.^[1] The other makes nondisclosure and nondisparagement clauses agreed to before the dispute arises judicially unenforceable.^[3] Both apply in Michigan because they reach cases and claims filed under federal, tribal, or state law.^[1][6]

This page explains each law in the words of its text, what each one leaves untouched, and where Michigan law stands, including a pending bill. A nondisclosure agreement (NDA) is a contract term that restricts what a person may say; arbitration is a private process that replaces a court case.

The two federal laws side by side

Question	Arbitration law (9 USC 401-402)	Speak Out Act (42 USC 19403-19404)
What it targets	Predispute arbitration agreements and predispute joint-action waivers[1]	Nondisclosure and nondisparagement clauses agreed to before the dispute arises[3]
Disputes covered	Sexual assault disputes and sexual harassment disputes[1]	Sexual assault disputes and sexual harassment disputes[3]
Effect	At the election of the person alleging the conduct, the agreement or waiver is not valid or enforceable for a case relating to the dispute[1]	The clause is not judicially enforceable in instances in which conduct is alleged to have violated federal, tribal, or state law[3]
Timing	Any dispute or claim that arises or accrues on or after March 3, 2022[7]	A claim filed under federal, state, or tribal law on or after December 7, 2022[6]
Who decides coverage	A court, rather than an arbitrator[2]	The statute speaks of clauses not being "judicially enforceable"[3]

Forced arbitration: what the 2022 law says

The operative sentence reads: "at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute."^[1]

Several features follow from that text.

• The choice belongs to the person alleging the conduct. The statute operates "at the election of" that person or the named representative of a class or collective action.^[1]
• It covers class and joint-action waivers too. A "predispute joint-action waiver" is listed alongside a predispute arbitration agreement.^[1]
• It reaches state-law cases. The case may be one filed under federal, tribal, or state law.^[1]
• It concerns agreements made before the dispute. Both kinds of agreement the statute names are "predispute."^[1]

How the law defines the two kinds of dispute

A "sexual assault dispute" is a dispute involving a nonconsensual sexual act or sexual contact, as those terms are defined in section 2246 of title 18 or similar applicable tribal or state law, including when the victim lacks capacity to consent.^[8] A "sexual harassment dispute" is a dispute relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal, or state law.^[8]

Because the second definition refers to state law, Michigan's own definition of sexual harassment is relevant. The Elliott-Larsen Civil Rights Act defines it as unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct or communication of a sexual nature under three listed conditions.^[9][10] That definition is explained in workplace sexual harassment law in Michigan.

Who decides whether the law applies

Arbitration agreements sometimes say that the arbitrator decides whether a dispute belongs in arbitration. For these disputes the statute provides otherwise: the applicability of the law to an agreement to arbitrate, and the validity and enforceability of an agreement to which it applies, "shall be determined by a court, rather than an arbitrator."^[2]

Which claims are covered by date

The law applies "with respect to any dispute or claim that arises or accrues on or after the date of enactment," which was March 3, 2022.^[7] When a particular dispute or claim "arises or accrues" is a question the quoted text does not answer by itself.

NDAs: what the Speak Out Act says

The Speak Out Act's rule is one sentence: "With respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated Federal, Tribal, or State law."^[3]

The Act applies with respect to a claim that is filed under federal, state, or tribal law on or after December 7, 2022.^[6]

What the Speak Out Act does not reach

By its words the Act covers a clause "agreed to before the dispute arises."^[3] A confidentiality term negotiated after a dispute has arisen, such as one in a settlement agreement, is not described by that phrase, and the Act's text does not address it. The Act also states that nothing in it prohibits an employer and an employee from protecting trade secrets or proprietary information, or prohibits a State from enforcing a state law on these clauses that is at least as protective of an individual's right to speak freely.^[11] The Michigan rules this guide's sources identify are in the next section.

Where Michigan law stands

No general Michigan statute found; one bill pending

The research for this guide found no general Michigan statute on confidentiality provisions in sexual misconduct settlements.

Status as of October 4, 2026: House Bill 5508 of 2026 would amend the Elliott-Larsen Civil Rights Act by adding a section 706 to prohibit confidentiality provisions in settlement agreements in sex discrimination and harassment matters. It was introduced on February 5, 2026 and referred to the House Committee on Economic Competitiveness. Its history shows no later action, and it has not been enacted.^[4][12]

Bill status changes, so anyone relying on this point should check the Legislature's bill page on the day it matters.

The school-employee rule

Michigan does have one specific prohibition. A school district, public school academy, intermediate school district or nonpublic school "shall not enter into a collective bargaining agreement, individual employment contract, resignation agreement, severance agreement, or any other contract or agreement that has the effect of suppressing information about unprofessional conduct of an employee or former employee or of expunging information about that unprofessional conduct from personnel records."^[5]

• Any provision of a contract or agreement contrary to that rule is void and unenforceable.^[5]
• The rule does not restrict expunging from a personnel file information about alleged unprofessional conduct that has not been substantiated.^[5]
• "Unprofessional conduct" means one or more acts of misconduct; one or more acts of immorality, moral turpitude, or inappropriate behavior involving a minor; or commission of a crime involving a minor. A criminal conviction is not an essential element.^[13]

The same statute is the reason a prior school employer's records travel with an applicant: before hiring, a school must ask an applicant's current or most recent employer about unprofessional conduct, and the employer must provide the information and related personnel documents not later than 20 business days after receiving the request.^[14] The criminal provisions for school staff are in teacher-student sexual conduct laws.

What these laws do not change

The provisions quoted above deal with arbitration and confidentiality clauses, not with filing deadlines. The deadlines for agency complaints and lawsuits are covered in deadlines for a harassment claim and civil lawsuits for sexual assault.

Retaliation is governed by separate provisions. Michigan's civil rights act prohibits retaliating or discriminating against a person because the person has opposed a violation of the act or has made a charge, filed a complaint, testified, assisted, or participated in an investigation, proceeding, or hearing under the act.^[15]

Defamation claims have their own rules. Under Michigan's libel and slander statute, the period of limitations for a defamation action is 1 year, and an action based on a communication involving a private individual requires that the defamatory falsehood concern the individual and was published negligently.^[16][17] Disputed accusations are discussed in false allegations of sexual misconduct.

What people get wrong

"Michigan bans NDAs in sexual harassment settlements." No such statute was found; the bill that would do so has only been introduced.^[4] The one enacted Michigan rule located is specific to schools.^[5]

"The Speak Out Act voids every confidentiality clause." Its text reaches a clause "agreed to before the dispute arises."^[3]

"The arbitrator decides whether my case stays in arbitration." For these disputes the statute assigns that question to a court.^[2]

"The arbitration law cancels the agreement automatically." It operates at the election of the person alleging the conduct.^[1]

People on either side of a workplace complaint can also read accused of sexual harassment at work: what to know, and the differences between court systems are in criminal case vs. civil case.