BREAKING THE MYTHS OF NDA’S

The plethora of discussions flooding the internet on non-disclosure agreements (NDA’S) in sexual harassment/sexual assault cases have led to some false assumptions. Let’s clear up some of them.  

First, what is an NDA?

  In some jobs, employment is contingent on signing an NDA up front, which prohibits an employee from publicly disparaging their employer. The concept of this type of NDA is problematic, mostly because it is unfair for the employer to make such an NDA a condition of employment. The employee does not freely agree to this NDA, and is usually not represented by counsel.   This article addresses the other type of NDA’s, the ones our firm most often comes across in the settlement of a discrimination case. Although it is generally understood that this type of NDA protects the employer from disparagement and from public knowledge of claims against them, NDA’s cannot prevent an employee from bringing claims of illegal conduct to certain government agencies, including the Equal Employment Opportunity Commission.   Not all NDA’s are alike, and the complexities range from a simple agreement that the victim not disclose the amount of a settlement, to a more complex mutual agreement that various involved parties not discuss any aspect of the facts underlying the victim’s claim. What is less understood about the NDA is that it often plays a very important role in protecting victims of harassment and their families, particularly where it helps them move on in their career, sparing them the embarrassment of disclosing the very private details of their harassment or assault.  It lets them accept a private settlement in an amount best for them, while allowing both parties to move forward without attacking each other for past behavior.   Our firm’s role is to always protect our client’s interests, and if they seek the protections of such an agreement, then we help compose the language of an NDA that works best for them.  

Breaking an NDA

  Given the complexities of the NDA’s protections, the recent posturing by various politicians that it would be “easy” for a company owner to “release” a victim from her NDA is simply not true. Also misguided are the various state legislators who have called for a total ban on NDA’s in sexual harassment cases.   First and foremost, the victim usually doesn’t want the release of an NDA that references any facts of their very private and usually embarrassing story of assault. Even if the NDA itself does not contain such details, the language it does contain would certainly raise a lot of personal questions about the details.   Moreover, putting a victim on the spot to publicly release an NDA is more than problematic to the victim for a myriad of other reasons. A victim may not want to share even the basic fact that they asserted a claim, or that they made a settlement with the company.  Certainly, it is their right to keep those facts private, not only from a new employer, but also from co-workers, friends, and sometimes even from their spouse and children. It is generally not something they would want the media, social media, and general public to learn. Significantly, at the time they entered the NDA, they know they made the very difficult choice of a confidential settlement rather than a public outing of the company’s illegal behavior. Having to be shamed for that difficult choice years later is not something they usually seek.   Lastly, even in the unusual circumstance where a victim does want to be released from an NDA, such “release” by the company can also be a challenging concept. Since the company’s Board, its Shareholders, and its Executives are all changeable over a term of several years, it may be impossible for that organization to obtain the permission of all the parties involved.   No one can really anticipate all the issues that may arise under such circumstances of the “release” of a victim from his or her NDA. It’s a bargain that was struck under the existing facts of the time, and a later public disclosure can make those facts difficult to explain or justify.  If a party willingly enters an NDA under circumstances of settlement, and is represented by competent counsel, it is difficult to justify “releasing” it years later.