Given the non-stop coverage of Trump's erstwhile gal-pals in the past few weeks, everyone now ranks non-disclosure agreements (NDAs) as bottom fish along with drones, trolls, and fake news. When the Weinstein Company released women from non-disclosure provisions in settlement agreements they had voluntarily signed, this was widely viewed as a victory for the #MeToo movement. It was a victory for those victims who wanted to tell their stories.

But is the current rush to bar NDAs really helpful to victims of sexual harassment? Is Albany's answer provided in legislation passed last weekend—barring NDAs in agreements that settle sexual harassment claims unless they explicitly state that confidentiality is the “complainant's preference”—going to change anything? We are skeptical.

One of the earliest legislative actions aimed at NDAs is the “Harvey Weinstein tax,” conveniently overlooked in the thousand-page December Trump tax cut bill. New §162q of the Tax Code removes tax deductions for both the amounts paid to sexual harassment victims under agreements containing an NDA, and for the attorney fees paid by the parties in negotiating and executing these agreements. This new law harms victims in at least two ways. First, it will lower settlement offers, as employers will still want confidentiality but will adjust their offers—particularly when the numbers are substantial—to reflect the loss of tax deductions for the settlement amount and their legal fees. Second, the new law eliminates victims' ability to deduct their attorney fees, including both fees that they paid directly to their lawyers, and fees paid on their behalf by the company, which are considered under the Tax Code to be income to the victims. The resulting decrease in the total value of settlements with NDAs needlessly punishes complainants.

What Congress, and the New York legislators have failed to appreciate is that many victims of harassment—particularly workplace victims—want confidentiality, at least as much as their employers, because knowledge that they had threatened to bring a lawsuit is widely understood as the kiss of death to an otherwise promising career.

Two provisions in settlement agreements—confidentiality and non-disparagement—historically offered some protection to complainants alleging harassment or discrimination. Confidentiality provisions require a settling employee to keep both the terms of the agreement and the underlying conduct giving rise to the agreement confidential. Non-disparagement is less well known or understood. These provisions require the settling victim to agree not to say anything that, even if true, would put the harasser or his employer, or any of the employer's past, present, or future officers, directors, shareholders, employees, or even lawyers, in a bad light.

In return, lawyers for the victims ask for “mutual” confidentiality and non-disparagement, even though they understand that what they get is never truly mutual. Employers always demand exceptions from confidentiality promises for persons who “need to know” of the allegations or settlement for business reasons. And, while most employers are willing to consider mutual non-disparagement, they rarely agree that the company as an entity will not disparage. At best, most agreements identify a few senior managers who are instructed to refrain from disparaging the settling victim.

The limitations on these “mutual” provisions are significant. Companies remain free to make whatever statements they deem necessary in their own interest. They are known to be very creative in identifying persons with a “need to know.” And settling employees have no recourse if a manager chooses to ignore the instruction not to disparage. The “midnight phone call,” from one professional colleague to another asking “off the record” why the employee left or what the person thought of her performance, is rarely disclosed, and far too common. Just ask any person who has made allegations of sexual harassment against a former employer about their experiences. You may well hear about reaching the end of a long search process, when all that was left was setting the start date, when suddenly the company decided to “go in a different direction.”

While these protections were less than ideal, they nonetheless provided some much needed comfort to victims concerned about the impact on their careers and reputations as a result of raising claims of harassment or discrimination. Which brings us to the NDA provisions in the Budget bill enacted in Albany on March 30th. The new law, part of a legislative package responding to the #MeToo movement, bars enforcement of NDAs in agreements settling claims of sexual harassment unless the agreement explicitly states that confidentiality is the settling complainant's “preference.”

We applaud the Legislature's effort to free complainants from the strictures of NDAs. But we think that it is both misguided (because it fails to recognize that most victims want the companies they are settling with to be silent) and likely ineffectual.

Most sexual harassment claims are settled privately—and quietly—without a lawsuit. Until the recent legislative actions against NDAs, it was assumed by both sides that the agreement would include non-disclosure provisions. Employers want to protect their reputations (and possibly the reputations of the alleged harassers) and keep other employees from knowing the amounts paid to settle claims. We have already explained why victims seek the protections of an NDA.

We do not believe the new legislation will change anything. Most companies will continue to include non-disclosure provisions in proposed settlement agreements, and most complainants will confirm that their acquiescence in these provisions was voluntary if the result is a more generous settlement.

There is one straightforward way to effectively eliminate the constraint of NDAs on sexual harassment victims who want to speak out while still protecting victims who place a high value on confidentiality. Lawmakers should bar entities settling harassment or discrimination claims from enforcing confidentiality or non-disparagement provisions that demand public silence from victims, finding that enforcement of such provisions is against public policy. This legislation would address the real problem with NDAs—that they have muzzled victims who want to be heard– while permitting agreements providing the confidentiality that most victims affirmatively seek. Although some companies might simply refuse to agree to such one-sided NDAs, we think it likely that many companies will acquiesce when victims insist on the right to speak as a condition of settlement, both because settlement will be in the company's economic interest, and because the alternative to a settlement is a lawsuit where the victim's voice will be heard loudly and clearly.

Shira A. Scheindlin served 22 years as a U.S. District Judge in the Southern District of New York, during which she handled many cases of sexual harassment and discrimination. She is now of counsel at Stroock & Stroock & Lavan. Rosalind Fink heads the employment practice at Brill & Meisel. She writes and lectures frequently on employment law, harassment and discrimination.