Over the past several years, some U.S. states have passed laws that weaken or nullify non-disclosure agreements (NDAs) that restrict employees from discussing incidents of sexual assault and harassment in their workplace. A new study published by the Southern Methodist University Cox School of Business Research Paper Series has examined how these laws impacted the hiring of women at more than 80,000 U.S. venture-capital-backed startups from 2014 to 2022.
According to the study, startups in states that passed NDA reforms hired some 7 percent fewer women per year after the legislation went into effect, compared to startups in other states. The largest declines were found among women in junior positions — who are statistically more prone to workplace sexual harassment — and in smaller or male-dominated startups.
However, these companies also experienced more departures of male managers and, as a result, promoted more women into senior-level positions. Thus, although NDA reforms reduced women’s hiring in the short-term, they appear to have led to internal restructuring that promotes women into leadership roles, which may, over time, create more accountable and inclusive organizational cultures.
The study was conducted by scholars at the University of Illinois at Chicago, the Yale School of Management, and Southern Methodist University.