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Friday, February 21, 2020

Dear Mike Bloomberg: Here's How You Should Have Answered the NDA Question

Without a doubt, Elizabeth Warren eviscerated Mike Bloomberg this week regarding the sexual harassment settlements his company has that contain non-disclosure agreements (NDAs). I don't know why he wasn't prepared for this question, as the issue has been all over social media. But here's what he should have said:
As a matter of fact, I have with me my signed modification of an NDA. As you know, non-disclosure provisions are part of a larger settlement or severance package, and they provide confidentiality of the agreement. They also provide that they can only be modified in writing signed by both parties. Here is my signed modification. Anyone who has an NDA with my company regarding any sexual harassment claim is free to sign this and then we're both authorized to speak freely about the matter. I agree with you Senator Warren. I think anyone who wants to be released from an NDA with my company regarding any sexual harassment claim should be able to speak freely if they want. 
You should also be aware that my state, New York, has enacted legislation to make sure that sexual harassment victims aren't forced to sign NDAs. In New York, starting in 2018, NDAs are not allowed if there are sexual harassment allegations unless the complainant is the one who requests it. I think that's a good law and I would support a similar law nationwide.
Here's why that would have been a great response: most complainants also don't want settlement agreements to be made public for a number of reasons, including:

  • Future employment: Most settlement agreements provide what the former employer can say about them to potential employers, usually limited to dates of employment and job title. What you don't want is for the employer to say something cute like, "I need to look at the agreement to see what I'm allowed to say," which is why I always negotiate for mutual confidentiality. If a potential employer finds out the applicant raised sexual harassment issues against a former employer, they may think the employee is going to be a troublemaker and not hire them.
  • Privacy: Look at what happened to Monica Lewinsky and Christine Blasi Ford. Would anyone really want their name dragged through the mud in a presidential race? Ms. Lewinsky's career path was damaged for a long time, and she faced threats and mudslinging. Ms. Ford had to move due to threats, whereas her harasser became a Supreme Court Justice. 
  • Envy: If coworkers think a victim got some "easy money," they may be subjected to retaliation and harassment at work. 
  • Retaliation: People who know the harasser may well retaliate against the victim.
  • Ability to negotiate: Many employers are willing to negotiate because they don't want the allegations to become public. That's the ugly side of NDAs, but it also gives employees leverage to negotiate a quicker settlement than had they filed a public lawsuit. Taking this ability away from them means that sexual harassment victims alone would be unable to use this leverage that every other potential litigant has before filing suit.
  • Keeping the ugliness away: Part of confidentiality is that the former employer won't be able to talk about what a terrible employee the victim was, which is what happens when a lawsuit is filed. the defense is almost always that the employee was fired due to poor performance, and not due to complaining about sexual harassment, along with a denial that any sexual harassment occurred. If the employer is free to slam the victim publicly, their reputation can be destroyed. I'm guessing a billionaire can do quite a bit of damage to a former employee if he were so inclined. Releasing confidentiality means the parties can speak about anything, including any allegations, the person's job performance, and any other relevant issue

In short, there can be all kinds of  reasons why a sexual harassment victim might want an NDA. Mike Bloomberg should have been ready for the question, and prepared to free anyone who wants to be freed. But they get freedom at their own peril. I wouldn't recommend it.

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I appreciate your comments and general questions but this isn't the place to ask confidential legal questions. If you need an employee-side employment lawyer, try http://exchange.nela.org/findalawyer to locate one in your state.