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Non-disclosure agreements can enable abusers. Should we get rid of NDAs for sexual harassment?

Legally, we may never be able to draw a perfect line. That doesn’t mean we shouldn’t draw the line at all.
Image: Harvey Weinstein
Harvey Weinstein arrives at The Weinstein Company and Netflix Golden Globes afterparty on Jan. 8, 2017 in Beverly Hills.Chris Pizzello / Invision/AP file

Sexual harassment and assault is not about sex, it is about power.

Confidential settlement agreements can give perpetrators even more power over their victims by silencing them. One need look no further than the settlement agreements signed by some of the dozens of women and girls who have accused former USA Gymnastics team doctor Larry Nassar of abusing them.

Olympic champion gymnast McKayla Maroney signed one with USA Gymnastics that, if enforced, would have resulted in a $100,000 fine if she testified against Nassar. (USA Gymnastics said they would not enforce it.)

Clearly, these agreements can cause real harm. The monetary damages attached to violating a non-disclosure agreement make it impractical for most victims to ever consider breaking it.

Indeed, at first blush there is very little to like about confidential settlement or non-disclosure agreements in the context of claims of sexual harassment or sexual assault. As we know based on the now-public behavior of Harvey Weinstein, Roger Ailes, Bill O’Reilly, Larry Nasser, Bill Cosby and even President Donald Trump — just to name a few — these confidential settlement agreements can allow the alleged perpetrators of sexual harassment or assault to buy their victims’ silence.

Simply put, it’s likely that without these agreements, the misconduct of at least some of these powerful men would have stopped earlier. At the very least, it's likely that more people would have known about the wrongdoing from the beginning. Reporters would also likely have an easier time independently verifying stories of misconduct. They would not need to depend on outside individuals with to supply them with information.

But should we, as several people have argued, simply get rid of NDAs? Not exactly. There are some serious concerns we need to address before writing off all non-disclosure agreements about sexual harassment or assault (or other issues) as unenforceable.

First, what about false accusations? While not common, there are circumstances in which someone is wrongly accused of sexual misconduct. It can be cheaper and quicker to settle the allegation than to go to court to clear one’s name. Confidential settlement agreements allow the falsely accused to keep their reputations intact.

Second, what about victims who do not want to be identified? Confidential settlement agreements work both ways. They prevent both the accuser and the accused from discussing the substance of the agreement. Even in the era of the #MeToo movement, some accusers will be reticent to come forward for fear of social or professional retribution. We could create a rule in which the accuser, but not the accused, could remain private, but this would open up a Pandora’s box of legal and practical problems.

Third, without confidential settlement agreements, will parties ever agree to settle their claims? Facing costly and drawn-out legal battles, many accusers would have to depend on plaintiff’s attorneys able to take cases on a contingency basis — meaning the lawyer only gets paid if and when the client wins. Right now, plaintiff’s attorneys who work on contingency expect that most of these kinds of cases will be settled. So getting rid of NDAs could change the time and money calculus for both accusers and lawyers.

Fourth, could this lead to a slippery slope in which we decide that confidential settlement agreements in other areas are also unenforceable? Confidential settlement agreements are common and useful in a variety of employment contexts, particularly when an employer possesses private and/or proprietary information. We should be careful about prohibiting confidential settlement agreements regarding claims of sexual harassment and assault and make any prohibitions strictly tied only to that area.

Finally, and relatedly, should the government be in the business of telling private parties which private agreements will be enforceable and which will not? Of course, the government does this all the time. Contracts to commit crimes are void. Contracts in which parties agree to do something like only rent units in a building to Caucasian people would similarly be unenforceable. In addition, certain pre-marital agreements, like those that promote divorce or waive child support, will be void because they violate public policy.

But confidential settlement agreements regarding claims of sexual assault and harassment are not as obviously problematic as an agreement to commit a crime or engage in a racist action. There are reasons weighing on both sides of the balance on this issue. Real people will endure real hurt if we decide that non-disclosure agreements about sexual harassment and assault are unenforceable. And real people will endure real hurt it we decide the opposite.

Our system of laws molds the society we want to live in, and provides guidelines for behavioral norms.

Our system of laws molds the society we want to live in, and provides guidelines for behavioral norms. For almost every law, we must evaluate whether it is better to dictate certain behavior or allow citizens to make those decisions for themselves. The way we draw these lines is, by definition, imperfect. There will always be people we wish we could have protected who we can’t, and wrongdoers who we wish we could punish but can’t.

But just because we can’t draw the perfect line doesn’t mean we shouldn’t draw the line at all.

For example, California currently treads a smart middle ground that other states may want to follow. California prohibits non-disclosure settlement agreements when the facts of the claim could be charged in a criminal proceeding as, among other things, a felony sex offense, an act of childhood sexual abuse, or an act of sexual exploitation of a minor.

Essentially in California, parties cannot enter into a confidential settlement agreement for the worst types of sexual crimes — those that rise of the level of felonies or are perpetrated against children. But the state does allow agreements in other cases. Ultimately, California may strike the balance about as well as any government can.

Jessica A. Levinson is a professor at Loyola Law School, Los Angeles and president of the Los Angeles Ethics Commission. She tweets at @LevinsonJessica.