In defense of confidentiality (yes, even in harassment cases)

The proposal to do away with confidentiality in sexual harassment settlements is likely to hurt victims at least as much as it exposes perps.

One of the most talked-about proposals put forth since the recent sexual harassment publicity begun by Harvey Weinstein, et al., has been to ban - or, more precisely, render unenforceable - non-disclosure, or confidentiality, provisions in settlement agreements. I'll call them "NDAs" for short.

"I can't talk - I have an NDA!"

I favor making NDAs unenforceable when a government official settles a sexual harassment claim. Even if the official is innocent and settles only to avoid litigation, the fact of the payout itself is a matter of public interest to us as citizens and taxpayers. If the official is a harasser, that fact is certainly a matter of public interest, as well.

However, in private sector settlements, I think banning NDAs would be a mistake. Well, of course you do, Robin - you represent employers!  

Admittedly, I'm going to oppose anything (within reason) that is not in my clients' interests. But I also think banning NDAs will disadvantage the majority of alleged victims. Here's why:

No. 1: With the possible exception of Gloria Allred, almost nobody wants attention to be drawn to a sexual harassment case. The employer doesn't. The alleged perpetrator doesn't. And here's a news flash: The alleged victim usually doesn't. Let's talk about the victim. (For convenience, I'm going to refer to the victim as "she" and the alleged harasser as a "he," but of course it could be "he-she," "he-he," or "she-she.") Why might an alleged victim not want to go public with harassment allegations? (a) She may still be working for the employer and want to continue to do so in peace and privacy. (b) She may be looking for or starting a new job, and may want a clean slate. (c) She may not want her kids or family members to know what happened. (d) She may feel, rightly or wrongly, that she didn't do enough to stop the allegedly harassing behavior. (e) She may be worried about becoming the victim of a social media mob. (f) The alleged harassment may have come at the end of a consensual relationship that she'd just as soon keep quiet. (g) She may just feel generally embarrassed that this has happened to her. (h) I could go on all day.


No. 2: Not every person accused of sexual harassment is guilty. I've represented employers in sexual harassment cases for many years. I often do believe the accuser, or at least have a very bad feeling about the alleged harasser. But I also sometimes believe the alleged harasser, and in a few cases, we've caught the accuser in flat-out lies. (I've blogged about this before. In a few cases, there was incontrovertible evidence, like love letters or a phone that was tapped by a suspicious spouse.) And then we throw the employer -- my client -- into the mix. The employer may have done everything right, and had no knowledge of what was (allegedly) going on and no reason to know. Not always, but often.

No. 3: You don't automatically win when you accuse someone of sexual harassment. #MeToo is great for raising awareness, but that's about it. In real life, you have to be prepared to present evidence to the Equal Employment Opportunity Commission or other agency, and if you go to court, you have to prove it to the satisfaction of a judge or jury. The employer and the alleged harasser also have the right to present evidence in their defense. Legally, the burden of proof is on the accuser, not the accused. 

No. 4: As a result of Nos. 1-3, many sexual harassment claims settle early. Often before there is anything close to a definitive determination about whether unlawful harassment actually occurred. For obvious reasons, this is often in the best interests of the alleged harasser -- after all, his name and reputation are going to be dragged through the mud, and his economic security, not to mention his marriage, may be in jeopardy. It's also frequently in the best interests of the employer. But it's also often in the best interests of the accuser because she can take the money, get a new job (if she wants a new job -- of course, employer retaliation is against the law, so she can stay put, too, if she wants), and get on with her life. Early settlement is often a win-win-win.

"Your employee is a creep, but I need to move on."

No. 5: If an NDA becomes legally unenforceable, then at least two of the three "winners" have just lost a major incentive to reach an early settlement. Yes, the employer and the alleged harasser still have the costs of litigation and the risk that a jury will sock it to them. But that may be a worthwhile risk to take in cases where the employer did nothing wrong and the alleged harasser is innocent. (Or maybe not exactly "innocent," but at least not a harasser - such as where the parties had a consensual affair that went bad for some reason, or where the alleged harasser acted stupidly but not illegally.)

No. 6: Therefore, without the possibility of an NDA, the employer and the accused harasser may either (a) refuse to settle, or (b) make a low-ball offer that won't be embarrassing when it becomes public. That means less money for the accuser, or possibly even no money. AND, perhaps, costly, drawn-out, contentious, stressful, and often embarrassing litigation. 

Here's a true-life example of how employee "protections" can sometimes work against employees' interests. To validly waive age discrimination claims under federal law, the plaintiff must be given seven full days to revoke the settlement once she has signed. This requirement is intended to protect the rights of people who are 40 and older. 

Guess who hates this provision in the law the most? Not employers. They simply hold off on paying until after the seven-day period has expired. It's some of the 40-and-over plaintiffs who hate it because it delays their payout by a week. I've actually had plaintiffs' lawyers ask me to let their clients "waive" the seven-day revocation period so their clients could be paid immediately. I wouldn't mind, but the right to revoke is non-waivable, so I have to say no.

If we must discourage NDAs, at least let the accuser have a choice. Alleged victims of sexual harassment should not be required by law to "go public." Employers and alleged harassers shouldn't be required to pay substantial sums of money in settlement with no confidentiality when they haven't even been found liable, and may never be.

A better idea might be to make NDAs more like another provision that applies to settlement of age discrimination claims: the "consideration" period. A valid waiver of age discrimination claims also requires that the employee be given 21 days (or 45 days in the event of a "group termination") to "consider" the agreement before signing. The employer is legally required to give the employee that much time to "consider," but the employee doesn't have to take it. If the employee wants, he or she can sign the agreement on the spot, thus speeding up payment by 21 or 45 days. Unlike the seven-day revocation period -- which applies after the employee signs the agreement -- the 21/45-day "consideration" period can be waived by the employee, and often is. 

Roughly translating this principle to the settlement of a sexual harassment claim, the agreement could be required by law to state that the accuser has the legal right to an agreement without an NDA. As an example, during negotiations, the employer could propose settlement with an NDA for $20,000, and a settlement without an NDA for $5,000. (I'm not talking Hollywood-level sexual harassment, obviously!) If the employee chooses the $20K-NDA, then the agreement would specify that the employee was offered a no-NDA option, understood that she had a legal right to accept an agreement without an NDA, and voluntarily chose the option with the NDA. If that disclaimer is included in the agreement, then the NDA would be legally valid and enforceable; otherwise, it would not.

This strikes me as a reasonable way to protect the accuser without forcing her to invade her own privacy or lose what might otherwise be a lucrative settlement. Plaintiffs' lawyers, tell me where I'm wrong.

Viewing this from the standpoint of the alleged victim got me to thinking about how we should handle NDAs in "serial harasser" situations. I'll be back soon with some thoughts about that.

Image Credits: From flickr, Creative Commons license. "Shh" by Liz Welsh, Gloria Allred by uncattiger, handshake by Bman2011.

Robin Shea has 30 years' experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act (including the Amendments Act). 
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