Outten & Golden: Empowering Employees in the Workplace

Do Nondisclosure Agreements Perpetuate a Toxic Workplace Culture?

November 2nd, 2017 | The Attorneys of Passman and Kaplan

In Hollywood, the cat is out of the bag. Scores of women (and men) are pouring out pent-up tales of sexual assaults and sexual harassment by famous producers, directors and actors. Every day brings new accusations against some movie icon. A group of women at Weinstein Co. has asked to be released from nondisclosure agreements so they can speak publicly to Harvey Weinstein’s alleged decades of predatory abuse and brazen quid pro quo demands.

The mere fact that an entire group of employees at one company is seeking to be unmuzzled is testament to a deep problem. Nor is it limited to the entertainment industry. NDAs and “hush money” settlements are common in every employment sector, including government agencies.

Sweeping it under the rug … until someone notices the lumps

There are two types of nondisclosure agreements at play in scenarios like the Weinstein saga:

First, there are standard NDAs in employment contracts which prevent employees from speaking up about what they’ve seen or experienced. These are a preemptive strike against disclosures that would reflect negatively on the company. When victims, witnesses and allies are effectively gagged, offenders are off the hook and a culture that tolerates sexual harassment is perpetuated.

Second, there are nondisclosure “agreements” thrust upon victims after the fact when they report harassment/assault or threaten legal action. In exchange for a payoff and/or a specifically worded NDA, they keep their jobs or walk away with a settlement and never speak of it again. The alternative is the threat of being blacklisted and smeared.
Again, this dynamic is not unique to Hollywood. Sexual harassment and coerced silence happens in every industry.

How nondisclosure agreements inhibit sexual harassment claims

A few mavericks have violated their NDAs with the Weinstein Co., knowing the company would face fierce public backlash if it tried to enforce the confidentiality agreements. But most people who are subject to NDAs do not have the upper hand. They can be terminated, sued and “outed” for breaching the agreement. The contract may specify monetary damages greater than the original settlement.

One-third of the 90,000 complaints to the Equal Employment Opportunities Commission in 2015 involved workplace harassment. About 45 percent of those cases were sexual harassment. A report by the EEOC revealed that taking formal action is the least common response for women or men who reported being sexually harassed at work.

Why would they not file a formal complaint or lawsuit? Some fear termination or other retaliation. Others fear they won’t be believed or that nothing will change. And some take no action because their hands are tied by employment agreements.

Many employment contracts and NDAs require that claims against the employer – including sexual harassment — be resolved through arbitration. Employers favor mandatory arbitration clauses because (a) there is no risk of a big jury award and (b) the proceedings are private. Whatever the outcome, it is kept quiet. For victims of sexual harassment who want their abuser exposed, arbitration is a dead end.

Nondisclosure agreements are not ironclad

The mere threat of enforcing an NDA is very effective. Some victims do not want the public exposure, expense and stress. Settling and staying mum was their way of making the best of an awful ordeal and moving on.

However, NDAs are not as bulletproof as most employees think. No employment agreement can supercede state or federal laws. A victim of a crime cannot be prevented from talking to police or testifying in court. An employer cannot prevent an employee from reporting sexual harassment to the EEOC. A settlement agreement and NDA only prevents the employee from suing the company and speaking publicly about the incident. And if the agreement was overreaching or coerced, it may not be enforceable.

If you are subject to a nondisclosure agreement, you also cannot be barred from talking to a lawyer. An employment law attorney can explain your rights, your legal options, and any possible consequences of breaching the NDA.

This blog was originally published at Passman & Kaplan, P.C., Attorneys at Law on November 3, 2017. Reprinted with permission. 

About the Author: Founded in 1990 by Edward H. Passman and Joseph V. Kaplan, Passman & Kaplan, P.C., Attorneys at Law, is focused on protecting the rights of federal employees and promoting workplace fairness.  The attorneys of Passman & Kaplan (Edward H. Passman, Joseph V. Kaplan, Adria S. Zeldin, Andrew J. Perlmutter, Johnathan P. Lloyd and Erik D. Snyder) represent federal employees before the Equal Employment Opportunity Commission (EEOC), the Merit Systems Protection Board (MSPB), the Office of Special Counsel (OSC), the Office of Personnel Management (OPM) and other federal administrative agencies, and also represent employees in U.S. District and Appeals Courts.

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