CALL TOLL - FREE 866-266-1800

Blog

Nov 17

The Damaging Consequences of Non-Disclosure Agreements

Written on behalf of Brian S. Kabateck

November 17, 2017

Recent sexual harassment scandals that involved the use of secret settlements have sparked a conversation about who really benefits from non-disclosure agreements. The purpose of these confidential settlements is to establish the boundaries, or subject matter, of the disclosure, without actually disclosing the secrets. Confidential settlements are becoming more common, as high-profile defendants cut deals with clauses that prevent plaintiff lawyers from publicizing their results.

Not only does this prevent the public from understanding the severity of the issue, but it also makes it difficult for attorneys to know the value of certain types of cases. The use of a non-disclosure agreement is also a great way to protect trade secrets, which can include any information that is not generally known and gives a business a competitive advantage in the marketplace. For example, through a nondisclosure agreement, companies can prohibit an employee from disclosing a secret invention or a concept to the public.

The media has now turned its focus on several high profile sexual harassment scandals involving rich and powerful men, including Harvey Weinstein, Bill O’Reilly and Bill Cosby, among others. Many people wonder if news about their alleged crimes would have come to light sooner if they were not shielded by confidential settlements aimed at squashing negative publicity.

The movie mogul Harvey Weinstein has been accused by dozens of women of sexual harassment and rape that occurred over a period of three decades. This led to his termination from The Weinstein Company, and he was forced to resign from the board of directors. Many of Weinstein’s victims had reached settlements that included non-disclosure agreements. Employees of Weinstein’s company are required to sign contracts promising not to make statements that could harm the reputation of the firm or its top executives. When female employees have tried to sue Weinstein for harassment, he and his company settled the claims confidentially, giving the victims a settlement with the condition that the plaintiffs not talk about the details of their cases.

New York state lawmakers have come together to sponsor a bill that would null and void any provision in confidential settlement agreements that has the effect of concealing claims of harassment, as well as other labor violations, like discrimination, retaliation and nonpayment of wages. The purpose behind the bill is to prevent alleged harassers from silencing their accusers. California passed a law last year prohibiting confidentiality clauses in civil settlements designed to cover acts that would be considered felony sexual offenses.

Clients often object to confidentiality because they are frustrated and angry about what has happened to them and what the defendant did. Defendants want confidentiality often because of the feared perception of guilt that accompanies a settlement. The secrecy itself, on the other hand, may be adverse to public policy and protection of the public, meaning it can allow the bad behavior and conduct to continue. On the other hand, confidential agreements can sometimes benefit the victims. Some victims might prefer to have confidentiality clauses in settlement agreements. Without the protection of a confidentiality clause, victims might be worried that an ex-employer will smear them in public or slow down their efforts to find a new job. A possible solution might be to allow confidentiality provisions with one-sided opt-outs; The employer would not be able to speak out about the matter unless the employee speaks first.

Confidentiality provisions that prevent victims from speaking openly about workplace sexual harassment are clearly problematic. Recent scandals have brought up the severity of the issue, and legal change will likely depend on whether state lawmakers have the courage to craft legislation limiting confidentiality agreements.

KBK represents victims of sexual harassment and sexual abuse who pursue civil action against a perpetrator, and in some cases, additional parties. While sexual assault and molestation can lead to criminal prosecution, a civil lawsuit is the only way that sexual abuse victims can recover monetary damages for the emotional and psychological harm they’ve suffered.

If you or a loved one has experienced sexual abuse you must learn more about your legal rights to receive compensation. Give one of our experienced personal injury attorneys at Kabateck Brown Kellner, LLP a call today to learn more about recovering damages and to explore your options. We can help you achieve the maximum compensation for the harm you or a loved one has suffered.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leave a reply

Your email address will not be published. Required fields are marked *