The recently revealed secret agreements from the likes of Bill O’Reilly and Harvey Weinstein have caused lawmakers to initiate legislation to prevent such confidentiality provisions.
New Jersey, New York and Pennsylvania have either introduced or publicly announced consideration of bills that would prevent employers and individuals from settlements with agreements that mandate confidentiality and nondisclosure.
Harassment settlements are negotiated agreements whereby both the employer and/or accused and the alleged victim agree to terms that are mutually acceptable. In these cases, each party gets something, and gives up something.
Thus, in a typical agreement, the alleged victim is offered monetary and possibly other relief (such as job change) in exchange for certain things, which typically includes a provision that the employee will not sue. In addition, every agreement I’ve written includes a provision that the employee will keep the terms confidential.
Specifically, language typically includes something to the effect, “I agree that the contents, terms and existence of this agreement must be kept confidential, and that I will not reveal them to anyone, except my spouse, attorney or accountant or unless required by law or regulatory or administrative agency, without the prior written consent of (insert company name). I also agree not to make disparaging remarks related to my employment with (company) at any time before or after my last date of employment with (company), including but not limited to verbally, in writing or electronically, including in any internet or online sites or online media.”
Provisions such as these are generally enforceable.
In 2014, Patrick Snay, a former headmaster of the Gulliver Preparatory School in the Miami area, settled his age discrimination case against the school, which included a payment of $80,000, in addition to other payments.
The agreement contained a confidentiality provision that neither Snay, nor his wife, could reveal the settlement to anyone other than their attorneys or professional advisers.
Snay shared the settlement terms with his daughter, who took to Facebook to boast about the settlement, posting, “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer.”
The school claimed that Snay broke the confidentiality provision of the agreement, and withheld the $80,000 payment. Snay sued to enforce the agreement and to receive payment, but a Florida appellate court ruled that Snay violated the confidentiality provisions.
The court held, “Snay violated the agreement by doing exactly what he had promised not to do. His daughter then did precisely what the confidentiality agreement was designed to prevent, advertising to the Gulliver community that Snay had been successful in his age discrimination and retaliation case against the school.”
While it is understandable that the public believes it deserves to be privy to such settlements that would expose misconduct, the confidentiality protects the alleged victim and accused.
Such settlements can bring permanent closure to difficult and uncomfortable situations. Without nondisclosures, fewer matters would settle amicably, and this would result in more victims undergoing long and difficult court cases that they might not win in the end.
In addition, many settlements are agreed upon not because the individual has engaged in misconduct, but truly for nuisance to avoid litigation.
Nuisance settlements typically occur when there is some indication the complaint is valid, but not enough for the case to likely prevail in court. A typical nuisance value is less than $25,000, in my experience.
Thus, despite the backlash around the most notable recent cases, we should encourage lawmakers to avoid interfering with legitimate negotiated settlements upon which both parties mutually agree.