Column

Buying Silence With a Bluff: How NDAs Exploit Litigants, With and Without Counsel

NSRLP
Author: Julie Macfarlane, NSRLP

The ever-growing use of non-disclosure agreements (NDAs) prevents those who sign from being able to “disclose” their experiences of reprehensible workplace discrimination. NDAs routinely silence the victims of sexual harassment, racism, bullying, and discrimination (among many other examples: for being pregnant, or requiring mental health leave, etc.).

Of questionable legality, NDAs are routinely demanded by defence lawyers in settlement negotiations. A gag on the victim is an obvious, albeit immoral, “ask” for legal representatives of alleged or actual perpetrators. They don’t want their reputation as a racist or a sexual harasser or a bully following them around, do they?

If your initial reaction is, “Why would employers want an NDA that gags both sides?” think “scandal,” and “image management.” And, of course, the reality that anyone leaving after complaints of this nature has very likely been doing this for years with earlier complaints falling on deaf management ears.

Persistent myths about NDAs

Defence lawyers shamelessly promote three myths about why victims should agree to NDAs:

  • “This is your [the victim’s] way to get ‘closure’ and ‘move on.’” Wrong – an NDA actually means the threat of legal consequences of breaching the gag order hanging over the victim forever, continuously revictimizing them. I have spoken to many people who now live in fear of what will happen to them if they ever speak up about their experience. Far from achieving closure for victims, it perpetuates the trauma.
  • “This is the only way to protect your privacy.” Whatever happened to a simple, one-sided confidentiality clause? Didn’t we learn this in first year Contracts? None of the individuals I have spoken with (and some of them had lawyers: more on that in a moment) were aware that they could ask for a confidentiality clause that would protect them, but not the harasser/abuser, or that they could stand up to an employer who wants them to be complicit in burying a scandal by asking for confidentiality for themselves, without simultaneously agreeing to “wipe” HR files on the harasser/abuser.
  • “This is the ‘only’ way to settle your case.” It is typical – because lawyers tell them this over and over – for victims to believe that they will never be able to gain a monetary settlement without agreeing to an NDA. Of course, the “only if” argument has been exploited by lawyers for decades. It’s the oldest trick in the book to create a false ultimatum. As a mediator, I have watched so many lawyers shake their heads and scoff at the idea that we should revisit the something that they claimed was non-negotiable (NDAs now seem to fall into this category). In fact, I don’t recall ever successfully concluding an employment mediation without one or both lawyers trying that trick before we got moving with a real negotiation.Last time I looked, the number of cases that settle before trial has remained pretty consistent for around 40 years, through many different “fashions” of settlement norms (the current NDA “fashion” has really only taken off in the last 5 or so years). In California, a Bill passed in 2018 banning NDAs in sexual harassment cases does not appear to have resulted in any change in the rate of settlement. Because of course it hasn’t: settlement is always about trade-offs and compromises. Trial is still just as unwelcome (especially for an employer or harasser/abuser trying to avoid publicity).

Regrettably, I have seen that some plaintiff (victim) lawyers also promote some of these myths. Perhaps this is the path of least resistance. There may be a need for more education for these lawyers.

Self-represented litigants and NDAs  

Many of those who have been victimized in their workplaces have no access to affordable counsel. Trade unions could help here, but are still trying to figure out what they should do when both victim and harasser/abuser are members. This left me as an SRL for a while when my union and my employer both refused to offer me assistance. In my personal experience and that of other women in sex abuse/harassment cases these situations have been resolved by siding with the male member – leaving many victims of harassment and discrimination without assistance.

This problem is becoming widely recognized, and there is a growing sensitivity to the basic power imbalances that facilitate oppressive NDAs. In the UK, a Parliamentary Select Committee established to recommend legislation (they did but the government ignored it) made the obvious point that “Employees without legal representation may be severely disadvantaged in the lead-up to an NDA being signed, as they have very little opportunity to negotiate the terms of the proposed settlement.”

My colleague Ifeoma Ozoma’s campaign to ban the use of NDAs to silence complaints of racial discrimination and harassment (California Bill 2021, the “Silenced No More” Act) emphasizes the need to protect the majority of employees who, having been discriminated against, now face negotiation with their employer without legal representation (and are unlikely to ever see the inside of a courtroom). As Ifeoma says, “The California Bill is not only for cases filed in court – it’s for any complaint brought up through any formal workplace process, including simply filing a complaint online or by mail. The whole point is that this is accessible to everyone.”

To be sure, some of those who represent themselves are effective in handling their own case: conducting their own research and bringing forward their arguments for compensation and protection. But where SRLs really struggle, as we have seen over and over at NSRLP, is with their lack of familiarity with the conventions and assumptions imposed upon them by lawyers on the other side. They are told all the time that, “this is just the way it is.” The cultural buy-in of the legal profession to using NDAs is not something that SRLs are going to read about in legal texts, or online law reports. They will be met with an absolute refusal to consider any other approach, which they will find confounding and puzzling, but may ultimately believe they really do have no other choice. Especially when it is possible that any unbundled advice they purchase on this issue is likely to be complicit with the current NDA culture – “oh yes, you will have to agree to that, everyone does.”

SRLs are especially vulnerable to the most extreme forms of NDAs. These regularly include a ban on speaking to family, friends, or therapists, and always prohibit explaining to a prospective new employer why they left the last workplace.

Both represented litigants and SRLs are vulnerable to financial exploitation via an NDA. When someone calls me and says, “I really don’t want to sign this, but I need the money,” what should I say? Unsurprisingly, research from the Center on American progress shows that three quarters of sexual harassment complaints come from the accommodations and food services industry. NDAs in cases involving low-income workers are being used to entice victims to accept minimal financial settlements in the face of horrible discrimination and harassment.

A matter of power

Essentially, the story of the explosion of NDAs – once used only to protect confidential trade secrets and business information – is the story of the exploitation and abuse of power.

  • Harassers/abusers have power over those whom they victimize.
  • Employers have power over employees.
  • Lawyers have power over their clients.
  • And those without legal counsel have less power than those with representation.

This will not go unchallenged forever. The endless expectation and promotion of NDAs needs to end. I am working with advocates in a number of countries – including Senator Lynn Ruane in Ireland, Zelda Perkins in the UK, Ifeoma Ozoma in California, and Sal Dennis in Australia – to co-ordinate an international campaign that will legislate NDAs out of existence, raise the rights of victims (both those with and without legal representation) to be individually protected, and protect those who could be the next victims when employers “pass-the-trash” by buying secrecy with NDAs.

Comments

  1. Barbara Captijn

    Excellent points made in this article by Dr. Macfarlane from the point of view of the victim.

    The NDA is often presented to self-represented litigants as a “take-this-or you’ll-get-nothing”, and “we’ll-see-you-in-court” ultimatum. It’s highly intimidating.

    The self-rep rarely has any interest in covering up wrong-doing, but the wrong-doer and their employer, or the industry oversight body which is supposed to oversee their work, are all interested in “making this go away”, to save their reputations, and get away with measly settlements.

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