The #MeToo Effect: How The Tide Is Turning Against NDAs For Sexual Misconduct

By Laurie Girand

Over one hundred women have accused Harvey Weinstein of sexual misconduct. Attorneys put six on the witness stand, two related to the charges, the other four testifying to Weinstein’s “prior bad acts” as examples of repeated coercive, predatory and exploitative behavior.  

The reasons women have chosen to speak publicly about their Weinstein experiences over the last three years are varied. Some had spoken in the past but been ignored. Some had been humiliated or intimidated into silence. Others, like Ambra Battilana Gutierrez, had signed NDAs (Non-Disclosure Agreements), contracts which typically specify that the victim or survivor (and the employer) will not divulge aspects of a settlement.  

Weinstein’s settlements had some of the most restrictive provisions ever conceived, including destruction of all evidence, withholding the contract from the survivor, and requiring a pre-signed letter by the survivor denying the event. Not only did Weinstein’s letters silence the survivors, they gutted the slightest potential of later substantiation.

Who benefits from an NDA related to sexual misconduct settlement?  

While victims and survivors of sexual misconduct should not feel guilt or shame, sometimes the circumstances of the misconduct just leaves them feeling that they don’t want to discuss the experience again. Think of the women exposed to Louis C.K.’s suddenly masturbating in front of them. Compartmentalizing is sometimes a healthy response to the revolting. In these cases, having an NDA can initially feel like a potential convenience in the face of future questions about departure from the prospective employer.  

While attorneys representing victims and survivors argue that NDAs help their clients maintain their privacy, there’s an acid test to determine who primarily benefits from NDAs: who pays for the privilege of silence? 

The answer? The defendant. The perpetrator always benefits because his actions are kept confidential, but if the employer is involved in the settlement, the business benefits. 

Think about it: the first benefit to the employer is that the existence of a settlement and the agreed compensation are kept secret; this prevents other claimants from negotiating for similar amounts. If the employer handled, investigated and resolved the complaint in a swift, transparent, and legal manner — with “Institutional Courage,” as coined by Dr. J.J. Freyd — there is no other benefit. 

Under such circumstances, where:

• the employer’s policies were clear,

• the employer acted sympathetically toward the victim/survivor while it conducted the required investigation,

• the employer put the abuser on notice and moved him to where he could not retaliate, and

• the employer dealt out appropriate consequences and reparations, the employee, while still suffering, could believe the organization had acted in both of their interests. 

What we’ve learned, however, from a host of headlines, is far too many employers have handled sexual misconduct differently. Instead, they have re-traumatized victims, shielded perpetrators from consequences, covered up civil or criminal violations in which the perpetrator engaged, and/or hidden the size and frequency of settlements from their own investors. These actions, if they came to light, could generate significant negative publicity and bring scrutiny from not only the Equal Employment Opportunity Commission but also the Securities and Exchange Commission, as abetting a lawbreaker should, which is one of the reasons employers have asked for NDAs as part of settlements.

Unfortunately, in addition to the employer and perpetrator, there’s a third beneficiary: the victim’s attorney, often hired on a contingency fee. This fee, which the attorney shares, creates a conflict of interest for the plaintiff’s attorney, for which other non-financial resolutions, such as obtaining apologies, compelling the predator into therapy or requiring his expulsion under certain conditions, have little value. All attorneys wish to have a broad set of terms around which to negotiate, some of which have more value to their client, which determine the final settlement fee.  

To the plaintiff’s attorney, signing an NDA is an “easy” term because it is valued by the opponent, while the plaintiff, caught up in the immediate, uncomfortable or traumatizing experience, doesn’t imagine that, later, they may regret accepting this term or feel coerced into this settlement. Likewise, contingency attorneys seeks to “wrap up” the case in a shorter timeframe, to limit their costs. Pressure from the plaintiffs’ attorney and the threat and intimidation that the employer would sue the victim for future violations may exacerbate the plaintiff’s feelings of victimization, isolation and powerlessness. 

NDAs for sexual misconduct count on the victim’s buy-in. However, after a decade or two, if the settlement amount was smaller, in comparison with a home mortgage and half a lifetime of earnings, the money may seem relatively insignificant; returning it may not seem like such a hardship, when compared with the opportunity for further healing and the ability to own one’s narrative and speak out against coercion and abuse.  

On the other hand, the larger the settlement, the more likely the company has engaged in a cover-up of significant unethical or illegal activity as well as financial risk it should have reported to shareholders. If a victim with a larger settlement chooses to break an NDA, the employer can drag the victim back to legal negotiations over the breach of contract, but in doing so, the employer admits that it has covered up wrong-doing. An NDA for sexual misconduct is never as ironclad as the attorneys negotiating it believe it is.

Aside from the employer, victim, perpetrator and attorneys, there are other “invisible” parties affected by NDAs for sexual misconduct. Without access to the data about settlements, other victims can’t know whether their settlements are better or worse than average, and no victim can know whether her situation was part of a repeated pattern. Likewise, no investor, Board of Directors or employees can be sure of how ethically an employer operates.  

For all of these reasons, the tide has turned against such NDAs. In October, 2019, NBC released all former sexual misconduct plaintiffs from their nondisclosure agreements. In mid-December, Gretchen Carlson, Julie Roginsky and Diana Falzone, each of whom had a settlement related to their employment at Fox News, formed “Lift Our Voices,” an initiative to end forced arbitration and NDAs in cases of sexual misconduct. On January 1, California’s law banning NDAs in cases of sexual misconduct went into effect.  

Under these new conditions, employers will be forced to finally address the toxic behaviors and transparently engage with victims, a win-win for those who might have been victimized, employees and investors. Who will lose? Perpetrators… and attorneys, who will have one less term to negotiate. 

Laurie Girand is the founder and President of  I’m With Them, a nonprofit website that privately connects victims of work-related sexual misconduct by a common perpetrator. She began her career in technology as a graphic systems software engineer, and after graduate school, worked at Apple Computer as an Evangelist and Product Manager. She subsequently started a consulting firm, providing strategy and product launches to companies including Adobe, Digital Equipment Corp., Netscape, Novell and Sun in the 1990s. Girand holds a BSE in Electrical Engineering and Computer Science from Princeton University and an MBA from Stanford.

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