States reconsider confidential deals in workplace harassment cases

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Confidentiality agreements have come under fire during the #MeToo movement as one way abusive men have been able to hold on to their jobs, and keep harassing more women.

State lawmakers are listening. They introduced bills in at least 16 states this year to restrict the use by private employers of non-disclosure agreements in sexual harassment cases, according to the National Conference of State Legislatures. They became law in six states: Maryland, Arizona, New York, Tennessee, Vermont and Washington.

In Maryland, Gov. Larry Hogan in May signed into law the Disclosing Sexual Harassment in the Workplace Act of 2018. The measure prevents employers from asking employees to waive their future rights to come forward with sexual harassment complaints.

An employer who enforces or attempts to enforce an employment contract, policy, or nondisclosure agreement that contains a waiver that is void is liable for the employee’s reasonable attorney’s fees and costs. The bill applies to any employment contract, policy, or agreement that is executed, extended, or renewed on or after Oct.1, 2018.

Furthermore, the law also requires employers with 50 employees by July 1, 2020, again in 2022 to complete a survey disclosing how many settlements the employer has made after a sexual harassment allegation, how many times an employer has settle allegations made against the same employee and the number of settlements that included non-disclosure provisions.

“It contains some compromises but overall we’re pleased it passed and we’re looking forward to learning the results of the survey,” said Lisae C. Jordan, executive director of the Maryland Coalition Against Sexual Assault.

California Gov. Jerry Brown is considering a bill that passed the Legislature this past week and was championed by actress Jane Fonda and former Fox News anchor Gretchen Carlson. Among other things, it would prohibit employers from requiring nondisclosure agreements related to sexual misconduct as a condition of getting or keeping a job.

Unintended consequences

Legal experts say it’s not clear yet what effect such legislation will have on sexual harassment in the workplace. Some warned that the new laws could have unintended consequences.

Zelda Perkins, a former assistant to Hollywood producer Harvey Weinstein, has said confidentiality agreements like the one she signed don’t adequately protect victims. She left the company in 1988 after one of her colleagues told her Weinstein tried to rape her.

Former Fox News anchor Juliet Huddy, who agreed to keep the details confidential when she settled harassment claims against former host Bill O’Reilly, told NBC’s Megyn Kelly last year that signing such an agreement is “not necessarily the best move.” If more women knew others were being harassed, they might be better prepared to fight it, she said.

Among the new laws is one in New York, which says settlements for sexual harassment may not include a confidentiality provision unless the person who brought the complaint wants it that way. Arizona now allows victims of sexual misconduct to talk to police or testify in a criminal case even if they signed a non-disclosure agreement.

The NCSL says Maryland, Tennessee, Washington and Vermont now also restrict non-disclosure agreements in employment contracts. Rhode Island Democratic state Rep. Teresa Tanzi sponsored a similar bill that she said was directly inspired by some of the infamous cases of harassment.

“This is how it was allowed to exist and perpetuate,” she said.

The Rhode Island bill ultimately failed.

Congress also targeted confidentiality agreements in the tax bill it passed late last year. It bars people from deducting confidential settlements with sexual harassment and misconduct victims as a business expense on their federal taxes.

A new Vermont law prohibits employers from requiring workers, as a condition of employment, to sign agreements preventing them from disclosing or reporting sexual harassment. It does not outlaw voluntary nondisclosure agreements in settlements.

Among those who pushed for the Vermont law was Lisa Senecal, who says she was harassed by an executive at a technology company in Stowe, Vermont, when she was seeking a job there.

“There really isn’t a more egregious form of sexual harassment than what happened with me,” she said, while declining to provide details.

She struck a settlement with the company that included a non-disclosure agreement, and the executive left the firm. Months later, another woman told Senecal she had been harassed by the same executive under similar circumstances.

Because of the non-disclosure agreement, Senecal was unable to tell the woman that she had experienced almost the exact same behavior, she said.

“I think the worst is to find out there’s someone else and know that you can’t help that person to the degree that you’d like to be able to,” she said.

The second woman sued, prompting a denial from the former executive. The company’s CEO told a local newspaper he was proud of the company’s track record on preventing harassment. Senecal said after hearing those comments and believing them to be untrue because of her own experience, she decided to break her silence.

Acts of secrecy

In testimony in June before a federal task force studying workplace harassment, employment attorney Kathleen M. McKenna disputed the idea that non-disclosure agreements are acts of secrecy that protect harassers.

She said proposals to ban them could be counterproductive. Without a non-disclosure agreement, for example, there could be less incentive for an employer to settle.

That could mean that victims of harassment have to go through the difficulties and uncertainties of a trial or agree to a settlement with a lower dollar figure.

Orly Lobel, a law professor at the University of San Diego, said employment contracts that prevent workers in advance from speaking about illegal or troubling conditions at work are probably unenforceable already. Even so, workers often don’t know that or might not be able to fight that battle, she said.

“The cost of litigation, getting an attorney to represent you — everything is kind of stacked against an employee taking that risk,” she said.

The new laws mean that employees accused of misconduct are also less likely to get a promise of secrecy from their company, said Elizabeth Tippett, an associate professor at the University of Oregon School of Law. But overall, she said it’s difficult to know what effect such laws will have on the workplace.

“It’s a really hard question,” she said. “We don’t really know how it’s going to change things.”

Associated Press writer Dylan McGuinness contributed to this report.