Despite #MeToo Glare, Efforts to Ban Secret Settlements Stop Short

Harvey Weinstein used them. So did R. Kelly, Bill O’Reilly and many less famous men.

When these men were accused of sexual abuse or harassment, they would use a legal tool that was practically magical in its power to make their problems disappear: a nondisclosure agreement. That, along with a substantial payment, would be enough to ensure that no one outside a handful of people would ever know what they had been accused of.

Such agreements have been a requirement for years in virtually every out-of-court settlement for sexual misconduct. But after the #MeToo movement took off in late 2017, there were calls around the country to restrict or ban such agreements, and thunderous outrage over their secrecy.

This. Exactly.

New data shows that over one-third of the U.S. workforce is bound by an NDA

But almost two years on, as the legislative sessions in many states draw to a close, this much is clear: The N.D.A. has not gone away.

“It’s business as usual,” said Susan E. Loggans, a lawyer in Chicago who has negotiated hundreds of settlements, including a number for women who accused Mr. Kelly of victimizing them. “We’re still using them all the time.”

Since the beginning of 2018, lawmakers in at least 26 states and Washington have introduced bills to restrict nondisclosure agreements in instances of sexual harassment and assault, according to the National Conference of State Legislatures and the National Women’s Law Center. There has also been federal legislation introduced in Congress and a Parliamentary inquiry in the United Kingdom.

But of the 12 states that have passed new laws, only one, New Jersey, has gone so far as to effectively negate these N.D.A.’s, by making them unenforceable when victims break them.

The gears are turning slowly because of friction between two competing goals: stopping tomorrow’s harassment from happening and giving today’s victims as much leverage as possible.

Supporters of a ban on confidential settlements say they allow harassers and abusers to prey on others who have no warning. But someone who has been assaulted or harassed may want to keep the details private, or they might be willing to do so if it helps them get a meaningful settlement, something that could help them move on. And a harasser may not be willing to settle if he knows the deal may become public.

In some states where bills were seriously considered, bar associations and business groups have lobbied against them. The California Chamber of Commerce opposed the bill that was eventually passed in that state, saying it would force companies to go to trial to “preserve their public image.”

The New Jersey State Bar Association was a vocal opponent of the bill there.

“It’s not popular for any business, or bar association for that matter, to take what could be perceived as a stand against a sex harassment or sexual assault victim,” said Christine A. Amalfe, a former trustee of the state bar who helped draft its position on the bill.

Nonetheless, she said, “this law in New Jersey appears to be a bit of an overreaction to what MeToo was really about.” Ms. Amalfe said that New Jersey’s new law will hurt victims because defendants will be more likely to fight allegations in court if they know the accusations could become public anyway.

Nondisclosure agreements are common in the legal world and in business, where entrepreneurs make workers sign them to protect ideas and corporate plans. Celebrities use them with employees in an effort to maintain some privacy. An N.D.A. cannot stop a victim from cooperating with a police investigation, but generally, once a deal is reached, that is where the talking stops.

The legislative proposals around the country have been targeted at the use of N.D.A.'s in cases of sexual misconduct. So far, most of the bills that have passed have placed restrictions on these agreements, without banning or neutralizing them.

California’s law restricts the agreements once a formal complaint or lawsuit has been filed, and Oregon’s law allows them only at the request of the accusing employee. Some states now limit or bar nondisclosure agreements when the accused works for a government agency. And several of the new laws prohibit employers from requiring new hires to agree to nondisclosure settlements if they ever claim harassment in the future.

Indeed, some women’s advocacy organizations, like Time’s Up, have called for limits on nondisclosure agreements, but not that they be abolished altogether.

Michele Landis Dauber, a professor at Stanford Law School, noted that “silence is pretty much the only thing the victim has to bargain with.” Still, she said, there was a greater good in banning N.D.A.’s. “These agreements are not in the public interest because they allow for serial harassers to continue to inflict damage on multiple people down the road,” she said.

Zelda Perkins, who worked in the London office of Miramax, signed a strict nondisclosure agreement upon leaving the company in 1998. Ms. Perkins said that while she was working there for Mr. Weinstein, he would sometimes expect her to watch him shower or work with him while he was partially dressed or naked. She finally decided she had to leave when a young assistant Ms. Perkins had recently hired told her that Mr. Weinstein had tried to sexually assault her.

On their way out, Ms. Perkins said, she and her colleague negotiated a settlement that called for therapy for Mr. Weinstein, more protections for Miramax employees and payments of 125,000 pounds for each of the departing women.

In exchange, they would be silent. It took nearly 20 years for the accusations against Mr. Weinstein to become public. She said her lawyers gave her the impression that it would be their word against his in court, and so a settlement was their only real option.

The agreement meant that when she went looking for a new job, she could not explain to potential employers why she left Miramax, or even discuss her time there. During two interviews, she said, men conducting them suggested she and Mr. Weinstein had been having an affair.

She was not allowed to keep a copy of the agreement for herself.

“We didn’t even have a record of that to safeguard ourselves,” Ms. Perkins said.

Breaking a nondisclosure agreement often comes with stiff financial penalties. But because of the public attention on the issue, some women in high-profile cases have been able to speak out without being penalized. A woman named Lanita Carter broke her agreement when she told “CBS This Morning” that R. Kelly had masturbated in front of her and spit in her face when she refused to perform oral sex on him. She has faced no financial repercussions.

(Mr. Kelly, who has been charged with sexually abusing Ms. Carter and three other women, has denied all the accusations.)

Ms. Perkins broke her nondisclosure agreement in fall 2017, in what she described as an effort to draw attention to the legal system that had shielded Mr. Weinstein. She has spent the last year and a half speaking publicly — to lawyers, to regulators, to the British Parliament — pushing for changes to nondisclosure laws.

“Humans are weak,” she said. “We wrote laws to protect ourselves from ourselves. And if, when you go to the law, you discover the law essentially protects and enables the perpetrator, that was the most earth-shattering discovery for me.”

McKayla Maroney, who was one of the many gymnasts abused by Lawrence G. Nassar and who signed a $1.25 million settlement with U.S.A. Gymnastics, sued the organization to release her from a nondisclosure agreement that could have cost her $125,000 had she broken it. U.S.A. Gymnastics later agreed not to penalize her for speaking out, said her lawyer, John C. Manly.

The Weinstein Company released anyone “who suffered or witnessed any form of sexual misconduct by Harvey Weinstein” from nondisclosure agreements last year. Mr. Weinstein is scheduled to stand trial in September in Manhattan on charges of sexually assaulting two women, and negotiators are trying to reach a deal on a $44 million settlement to address allegations made by other women.

Mr. Weinstein has denied having any nonconsensual sex. His representative declined to comment about his use of nondisclosure agreements.

In some states, legislators who have introduced bills to limit nondisclosure agreements said they ran up against colleagues who were unsure about where to carve out a new line. Others ascribed the failure of their bills to the state’s overall politics, where parties have different priorities or the legislature’s focus has been elsewhere. Some advocates and legislators said that attention had shifted away toward the deepening state-level battles over abortion.

Despite the modesty of the changes overall, Andrea Johnson, senior counsel for state policy at the National Women’s Law Center, said she was heartened by the progress — especially for an issue that didn’t emerge from years of careful organizing, but came seemingly out of nowhere.

“It’s really an unprecedented level of energy around this very specific issue,” Ms. Johnson said. “But yes, everything takes time.”

Elizabeth Harris is a culture reporter. A Times reporter since 2009, she has covered education, retail companies for the business section, real estate and New York politics. @Liz_A_Harris

Source: Read Full Article