Preserve Nondisclosure Agreements
The intention of the legislation is worthy—to prevent the concealment of serial misbehavior by powerful (usually male) employers. The impact, however, is harmful in two respects.
February 15, 2019 at 04:40 PM
3 minute read
Senate Bill 121, which outlaws nondisclosure agreements in the settlement of private discrimination and sexual harassment litigation, has passed both houses of the Legislature and now goes to the governor's desk. Last June, we opposed this bill, and we still do. The intention is worthy—to prevent the concealment of serial misbehavior by powerful (usually male) employers. The impact, however, is harmful in two respects.
First, it takes money out of the pockets of individual plaintiffs and compels them to serve a public interest that they may not care about. Silence is valuable. A defendant may be willing to pay more and pay it faster if, in return, he is assured of the plaintiff's discretion. A plaintiff may be less interested in sisterhood and someone else's idea of the public interest than she is in getting the largest possible settlement in the shortest time. The bill sacrifices the private interest of those plaintiffs in favor of what its sponsors see as a broader benefit.
Second, it may not serve the public interest as effectively as its sponsors believe. By discouraging settlement of discrimination and harassment cases, it will prevent some from being brought at all. A defendant who knows that he cannot pay to protect his own reputation may feel that he has no other recourse than to defend himself by any lawful means, including an attack on the plaintiff's motives, veracity and credibility. In light of that risk, some victims who would have been willing to sue in order to obtain a quiet settlement and put the matter behind them will be deterred from going forward in the public eye and will not sue at all. Not everyone is as driven by a general passion for justice as we might like.
Assembly Minority Leader Jon Brammick (R - Union) said in support of the bill, “There is never a good reason to hide from public view harassment in the workplace.” For the foregoing reasons, he is mistaken. This is one of those cases where virtue is not as obvious as it first appears. To balance the interest of private plaintiffs in isolated cases against the public interest in the disclosure of serial misbehavior, we suggest that nondisclosure agreements remain valid when made but be retroactively voidable to show a defendant's pattern or practice of wrongdoing in any subsequent litigation by another victim. We urge the governor either to veto the bill outright, or to conditionally veto it and return it to the Legislature for amendment on those terms.
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