Sexual harassment claims have been flying through the media over the last year. The Weinstein Co., Fox News and Bill O'Reilly, and even President Trump have been the target of sexual misconduct allegations. In each of those cases, non-disclosure agreements were used to silence the claims and avoid legal consequences. So why would anyone agree to sign one?
In this blog post I will review the non-disclosure agreements used by Bill O’Reilly and the Weinstein Co. to prevent sexual harassment and misconduct allegations from going public. I will discuss the use of non-disclosure agreements for both employers and employees, and why a worker facing discrimination would be willing to sign one.
The #MeToo movement has been around for a while, now. Often, the allegations that hit the media are years, or even decades old. There are many reasons why the victims of sexual harassment or abuse may choose not to tell their story publicly. But sometimes the delays more legal than personal.
Local, state, and federal laws, including Title VII of the Civil Rights Act, make it illegal for supervisors, managers, and employers to harass or discriminate against their employees because of their sex or gender. The victims of sexual harassment and other forms of gender discrimination can turn to the Equal Employment Opportunity Commission or private employment discrimination attorneys to get compensation for sexual misconduct.
In many cases, that involves a lawsuit in federal court, but sometimes the issues can be resolved informally. When sexual harassment allegations resolve out of court, the settlement agreements can include a variety of remedies, including money damages for lost wages and other expenses, changes to workplace policy, and other compensation for harm done. In exchange, the employee gives up his or her right to sue for, and in many cases even talk about what happened on the job by signing a non-disclosure agreement (NDA).
Harvey Weinstein and Bill O'Reilly each faced delayed sexual harassment allegations last year as part of the #MeToo movement. In each case, their companies (the Weinstein Co. and Fox News) had made use of non-disclosure agreements to resolve the matters quietly and minimize media attention. Even then-candidate and reality-TV-star Donald Trump, by his attorney Michael Cohen, used an NDA to silence claims of sexual misconduct in 2016. When confronted with the fact that his lawyer had entered into an NDA with porn star Stormy Daniels, the President defended the decision, calling NDAs "very common among celebrities and people of wealth." However, the terms of those non-disclosure agreements and the circumstances surrounding them can sometimes cross the line from settlement to cover up.
The settlement agreement between Bill O'Reilly and Andrea Mackris and Rebecca Gomez Diamond was recently released by order of a United States District Court Judge. The contract went beyond non-disclosure. In addition to strict confidentiality, it required both the women, and their attorneys to turn over evidence related to the allegations, making it harder for them to prove any future case. If any of these materials ever became public, Ms. Mackris was required to disclaim them "as counterfeit and forgeries" -- in other words, to lie.
As part of the settlement, Ms. Mackris's attorneys, Benedict P. Morelli & Associates also agreed to provide legal advise to Mr. O'Reilly on sexual harassment issues, and not to take on new clients with sexual harassment claims against O'Reilly or Fox News. These clauses essentially removed the firm from the pool of experienced employment discrimination attorneys available to fight for Fox's employees' rights. This also raise ethical questions, since M. Mackris was required to waive any conflict of interest claims against Fox or the law firm.
The Weinstein Co. recently announced that former CEO Harvey Weinstein also "used non-disclosure agreements as a secret weapon to silence his accusers." While those agreements have not been made public, over 70 women have accused Weinstein of some form of sexual misconduct, up to and including rape. Weinstein was forced out of his company last year as a result of the allegations. Now the company has formally released the victims from any non-disclosure agreements they may have signed, saying:
"The Company expressly releases any confidentiality provision to the extent it has prevented individuals who suffered or witnessed any form of sexual misconduct by Harvey Weinstein from telling their stories. No one should be afraid to speak out or coerced to stay quiet."
However, the announcement was coupled with the Weinstein Co. filing for bankruptcy and Lantern Capital Partners agreeing to purchase substantially all the company's assets. This could significantly limit any recovery the Weinstein employees may have.
With all the bad press, it can be easy to question why sexual harassment victims would agree to sign settlement agreements that include non-disclosure agreements. Why not just go to court?
There is no such thing as a "typical" sexual harassment victim. Employees facing gender discrimination come from every industry, and have a wide variety of life experiences. Some of those circumstances can make private settlement agreements more attractive than a drawn out court battle. Sexual harassment victims may agree to sign a non-disclosure agreement if they:
A private settlement agreement can be a better solution for both employee and employer alike. It can resolve the matter quickly and privately and protect everyone's interests. However, as with any contract, it is the details that matter. When NDAs try to cover up criminal behavior, the court may not even enforce them.
A non-disclosure agreement is usually paired with a promise not to sue. This waives any right to civil compensation that the sexual harassment victim may have. It also says the person can't go to the media or discuss the matter with coworkers or future employers. But it does not forgive criminal behavior. If a person has faced sexual assault, he or she can still go to the police and report the crime. In most cases, this will not be a violation of the NDA. Sometimes, it can even cause the judge to void the NDA altogether.
But the employees who sign the non-disclosure agreements may not know the difference. An ex-assistant of Harvey Weinstein told the UK's MPs that she felt pressured to sign the NDA with Miramax Films, and she believed that if she ever discussed the issue in detail — even with mental health counselors or legal representatives — she would be breaking the law and could be sent to jail. She had no idea that the terms of the settlement agreement may have been unenforceable. She told the Women and Equalities Committee:
"There cannot be a legal document that protects criminal behaviour."
There are valid reasons for sexual harassment victims to sign non-disclosure agreements as part of out-of-court settlements. A swift and quiet resolution to issues can sometimes be best for everyone. But employees need to know the impact those NDAs can have, and when they cross the line into an illegal cover up.
At Eisenberg & Baum, LLP, our employment discrimination and sexual harassment attorneys know how to work settlement agreements and non-disclosure agreements to our clients' advantage. If you are facing an out-of-court settlement, we can help you review the language, so you know what you are getting, and what you are giving up. Contact Eisenberg & Baum, LLP, today to talk to an employment discrimination attorney.