NDAs, #MeToo, and You

Thursday, April 4, 2019

I got the idea for this post this past weekend when I was reading an article in Time (the one with AOC on the cover, I mean, can you even handle it?). The article was about Eliza Dushku (you’ll recognize her face from Buffy and Bring It On) and her “#MeToo Moment” (I have qualms with calling the public reliving of traumatic events a “moment” but that’s a topic for another day). She wrote an op-ed for the Boston Globe about her most recent experience with sexual harassment on the set of her show Bull. She wrote the piece despite signing a Non-Disclosure Agreement (NDA) as part of her settlement with CBS for $9.5 million - a ton of money but not as much as CBS would have paid her had she been able to complete her planned six-year contract with the network. Because Dushku feared litigation if she continued to discuss the settlement, for her interview with Time she tried to talk around the issue entirely. She did state, however, that “NDAs revictimize people. They give more power to the powerful. And as the less powerful person, you have to live in someone else’s fucked-up version of reality.” This quote, and Dushku’s story, are an apt example of why we should all be more aware, and wary, of non-disclosure agreements.

What's an NDA?

I'm glad you asked. A non-disclosure agreement is not a single form document, it can take shape in a number of ways. The term itself is used to refer to a large category of contractual agreements between people that prohibit the parties from speaking about certain topics. 

Employee handbooks and those pesky forms HR makes you sign before you can start working at a new job usually have some sort of provision that prohibits sharing things like intellectual property and other confidential company information. These may or may not encompass speaking of sexual harassment publicly.

The traditional NDA you usually hear about is the non-disclosure provision of a settlement agreement. What's a settlement agreement, you ask? Another great question. People talk about settlement agreements like everyone knows what they are but, just so we're clear, a settlement agreement is a contract signed between people/entities that are in dispute. Instead of going through with a court battle, which would include legal fees and the potential for losing on both sides, parties usually decide to settle. It makes a lot of sense and the vast majority of lawsuits end in settlement because litigation is so onerous. Both sides get to negotiate for a favorable settlement and when they come to an agreement they sign the papers and go their separate ways. 

Settlement agreements can take many forms but often, especially in situations that look particularly bad for one party, they include non-disclosure provisions that ban the parties from discussing the matters related to the lawsuit. If one party breaks that non-disclosure promise, that gives the other party the right to sue them for breach of contract. Some settlement agreements have a monetary penalty written into the NDA so a lawsuit isn't necessary. Instead, any violation of the NDA will trigger that penalty fee, which can be *pretty hefty*. Of course, the party at fault can always refuse to pay up which would require a lawsuit to compel the party to fork it over. If they have it. tl;dr it's a mess, it's confusing, and it's a lot of lawyers in a room squabbling all over an employee who's recently had to relive an awful experience in order to even report the abuse and get to the settlement stage.

Are These Things Legal?

Whether or not the contract is legally binding against disclosures related to workplace harassment is murky and best posed to a licensed legal professional (aka not me) before signing. Title VII of the Civil Rights Act of 1964 prohibits retaliation in the workplace against employees that complain of harassment, meaning that if you speak up they (probably) can't fire you. They also (probably) can't make your life a living hell at work, effectively forcing you to quit (also known as constructive discharge which I think is a gross phrase). But, as we've determined in past posts here, courts love to waffle around about definitions, so what qualifies as "retaliation" depends on the court you're in, and whether or not the retaliatory actions taken against an employee can be causally tied to their harassment complaints is usually a central question. That means a lot of defendants will argue, and courts will agree, that whatever the employer did (fired the employee, gave them bad reviews, disciplined them harshly) had nothing to do with the employee complaining about harassment. Additionally, a lot of courts love to fuss over the way in which the employee spoke up about the harassment. Basically the onus is on the employee (you know, the one being harassed) to be very reasonable and levelheaded in the face of a usually much more powerful company or organization wielding the full force of a usually very well-paid legal team.

Of course, none of this matters in the case of NDAs in settlement agreements because those agreements tend to come with the parties agreeing to go their separate ways professionally, so the person is no longer employed and thus concerns over retaliation for speaking up are not relevant. With settlement agreements that include NDAs like the one Dushku signed, questions of legality arise around issues of unequal bargaining power between the parties in the creation of the contract, unconscionability of the contract terms (that the terms are so obviously unjust that a court would never enforce them), and First Amendment freedom of speech issues. Of course, since no one talks about NDAs because, well, duh, you can't, companies can often get away with this legal murkiness because employees who are signing them are too afraid/don't have the resources to later challenge them. With the greater scrutiny given to NDAs because of the #MeToo movement, that seems to be changing.

What's Being Done to Stop the Madness?

A movement has begun around the country to try to limit NDAs at the state level. For example, California just passed a law that prohibits the use of NDAs in settlements involving sexual assault, harassment, or sex discrimination. New York passed a law that prohibits the use of confidentiality clauses unless the victim requests one for their own privacy. Proponents laud the bills as creating unprecedented protections for victims. Critics, however, worry that employers will be less likely to settle if they are prohibited from using NDAs, instead opting for drawn-out legal battles that will ultimately further harm the victim and be prohibitively costly for most employees.

However, the reality is that, like Dushku, many people end up signing settlement agreements with their employers after enduring workplace harassment, and will continue to do so, for the reasons mentioned above - litigation is costly and can last for years and there's no guarantee of winning. If a wealthy celebrity like Dushku isn't willing to undergo the whole ordeal, it's even more understandable why other people with fewer resources would be quick to settle. However, the non-disclosure provisions in these settlement agreements mean there is no name and shame - yes the companies are technically paying money for their wrongs, but they do not have to answer to the public for sheltering predators. They do not have to address the larger culture which allowed for the abuse to occur. NDAs prevent victims from warning others about workplace creeps. The power dynamics that led to the abuse are further enforced when a powerful company can literally silence the victims of harassment. I'd rather live in a society where this type of censorship is outlawed. If we've learned anything from the #MeToo movement it's that there is power in speaking out against abusers, that paving the way for victims of abuse to speak up can be incredibly empowering for others, and that abuse is often not an isolated incident but is, instead, symptomatic of a larger toxic power structure which has been allowed to proliferate because of NDAs. Something has to be done to stop the cycle, and outlawing NDAs in cases of sexual harassment seems like a step in the right direction.

Think I'm wrong? Feel free to drag me in the comments below. Or, better yet, write a rebuttal article and if it's any good I'll publish it. Email proselawblog@gmail.com.

Have any burning legal questions about pop culture or current events you want me to analyze? Pop it in the comments or slide into my DMs over on Instagram or Twitter.

Linked throughout the article, plus:
[1] Elizabeth Tipett, Non-Disclosure Agreements and the #MeToo Movement, American Bar Association (Winter 2019).
[2] Erin Carden, The Fate of NDAs in the #MeToo Era, Pen America (May 18, 2018).

further reading:
[1] Rebecca Traister, Good and Mad: The Revolutionary Power of Women's Anger (Oct. 2018)

*DISCLAIMER* Nothing I write on this blog should ever be taken as legal advice. This entire project is just me applying my limited knowledge of The Law to the news and trying my best to analyze it all. I am not an expert in anything. I don’t even have my JD yet.

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