Non-Disclosure Agreements: Perpetuating a Culture of Silence?

By: Jizell Lopez

As we previously reported here, we are conducting a mini-series of posts that will explore and examine some of the most important and interesting aspects of sexual harassment in wake of the Harvey Weinstein scandal that has not only dominated the news network and everyday conversation, but has also created a domino effect of sexual harassment and sexual abuse complaints against many prominent figures in the entertainment industry and in politics.

Throughout the past year, non-disclosure agreements (“NDA”) have been a popular topic in the news with reports coming out that companies shelled out millions of dollars to settle sexual harassment claims against high-profile men like Harvey Weinstein, Roger Ailes, and Bill O’Reilly in an attempt to keep those claims out of court and out of the public eye. NDAs and confidentiality clauses are common features of any settlement agreement and are not unique to settlements involving sexual harassment complaints.  The presence of an NDA in settlement agreements is intended to ensure that the party who asserted claims will not discuss the nature of the allegations or the terms of the settlement. This is important for both individuals and employers. Very frequently, employers settle meritless claims because of the high costs associated with litigation, and they do not want individuals spreading specious claims to others. Also, employers who choose to utilize NDAs do so to discourage others from asserting false claims in the hopes of receiving a similar settlement. If the parties enter into either an NDA or a confidentiality agreement, they are contractually prohibited from discussing the alleged claims or settlement.  Failure to fully abide by an NDA will, in theory, result in a breach of the settlement agreement.  Depending on the terms of the NDA, the breaching party’s settlement monies will be subject to forfeiture, and they may be liable for additional damages suffered by the non-breaching party. 

However, as the Bill O’Reilly situation and the more recent Weinstein allegations demonstrate, an NDA does not guarantee confidentiality.  In these two instances, women have come forward and talked at length about their prior sexual harassment claims despite the fact that some reportedly signed NDAs. Depending on the NDA at issue, Weinstein probably can, in turn, sue these women for violating the confidentially provision of the settlement agreement. Whether he will is an entirely different story. Currently, the details of the NDAs are not public, and Weinstein has yet to try and enforce any NDA.

The debate among the media and women’s rights groups is whether NDAs and confidentiality agreements, in the case of sexual harassment claims, increase the likelihood of continued sexual harassment because they perpetuate a culture of silence. Many argue that if the settling party’s allegations were valid and they were sexually harassed and/or assaulted, but they are prohibited from telling others about what happened to them, then other individuals will not be aware of the dangers posed by the harasser – assuming the harasser was not terminated as a result of the incident – which in turn puts these individuals at an increased risk.  Likewise, the fact that the harasser has not been exposed to the work force or general public may empower them to feel that they can get away with further misconduct.  This has been a point of discussion among many legislatures throughout the country. A California State Senator is reportedly introducing a bill next year that would ban confidentiality provisions in monetary settlements stemming from sexual harassment claims.

Despite the above criticism of NDAs, there are other potential benefits to the settling employee or individual.  The NDA can benefit those who have reportedly suffered harassment by protecting them from unwanted negative attention or retaliation. Not every alleged victim wants others to be aware of the incident and would much rather keep the situation private. Additionally, NDA provisions do not restrict an employee’s ability to report anything they may see or experience in the workplace going forward, and the provision does not eliminate an employer’s duty to investigate future claims and take appropriate corrective action.  

Many argue that there are both pros and cons of NDAs in sexual harassment claims. California State Legislature is adamant that they want change, and public pressure from the myriad of high-profile cases that continue to be reported every day may play a role in how the legislature may respond.  One thing is certain, the repercussions of this scandal are not going away, and individuals are demanding a shift toward recognizing an absolute zero-tolerance approach to sexual harassment in the workplace.

In our next post, we discuss certain precautions employers should take and what is required of employers to minimize the risk of a harassment claim, such as the importance of employers having an “open door policy” for reporting sexual harassment complaints.  It is important that employers foster an environment that promotes prompt reporting and ensure employees trust the employer’s process for handling sexual harassment complaints.

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