A two year battle on behalf of a client we have grown to love has finally ended in her favor! We are unable to disclose the identities of the parties due to a Confidentiality Agreement that the Defendant -Employer insisted upon in order to resolve the matter.
The case, a Whistle blower action settled after three weeks in trial. A jury verdict was not reached as the defense reached out to us after a key defense witness had testified on the stand.
The parties agreed to settle the case with an award to our client in the amount of $250,000.00. The defense also agreed to reimburse our client her attorney’s fees and costs in the amount of $250,000.00.
There are valid reasons to oppose confidentiality. It can be bad for clients, bad for lawyers, and bad for the legal system. Oftentimes, however, a plaintiff who wants to put a lawsuit to rest has no choice but to agree to the defense terms which inevitably requires confidentiality-or no settlement.
It is my hope that one day there will be an across the nation prohibition on confidentiality when it comes to employment claims. Society itself might be better off if all settlements were public knowledge. Wrongful conduct would be exposed not just for the economic justice of the victim, but for the broader societal purpose of curbing such wrongful conduct. Lawmakers and the public can see where problems exist, both in products and service suppliers, and act appropriately.
The American Bar Association published an excellent article by Ronald L. Burdge which was encouraged to be shared and I gladly do so in relevant part here:
“A good example is the Eleventh Circuit’s long-standing approach that settlements in Fair Labor Standards Act (FLSA) litigation should not involve confidentiality because it contravenes congressional intent behind the law and undermines regulatory efforts (Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982)) and that FLSA settlement agreements must be filed in the court’s public docket (Hanson v. Wells Fargo Bank, No. 08-80182-CIV, 2009 WL 1490582 (S.D.Fla. May 26, 2009)).
Unlike most states, Florida has a statute that prohibits concealment of public hazards, which effectively prohibits confidentiality (Fla. Stat. Ann. 69.081). California has a similar statute that forbids nonfinancial confidentiality of motor vehicle problems in its Lemon Law settlements (Cal. Civil Code 1793.26).
Secrecy in settlements also hurts lawyers. A lawyer cannot place a fair and reasonable value on a case when the lawyer cannot compare it to other known cases. It is particularly harmful to inexperienced lawyers who may be most prone to undervaluing a case. The secrecy allows the perpetrator to assess a fair value while preventing the innocent victim from doing likewise.
Confidentiality does not actually promote settlement. The vast majority of cases already are settled without trial. Fundamentally, a settlement of a court case should be a public proceeding, just as a trial is a public proceeding of a court case.
Moreover, the legal system does not belong to any industry. It belongs to the public. Courts function best in the daylight of an open, transparent administration of justice. Otherwise, people cannot observe and understand what is going on and how the courts protect everyone by their fair administration of justice. Secrecy protects repeat offenders and harms everyone else. Openness is consistent with basic Constitutional principles of our government.”
As it stands there is no accurate way in which the courts, the EEOC and the Division on Civil Rights can statistically account for the number of employment claims, lawsuits, value of settlements and amounts paid on any employment claims primarily because Confidentiality Agreements prevents it.
In New Jersey, there is Bill S-121, which disallows defendants from requiring plaintiffs to sign Non-Disclosure Agreements for out-of-court settlements regarding discrimination, harassment, and retaliation in New Jersey.
The legislation was approved by the Senate in June 2018 and makes NDAs unenforceable in sexual harassment settlement agreements and employment contracts for cases of workplace sexual harassment, discrimination, and retaliation. Specifically, it prohibits employment contracts from forcing employees to waive their rights and suppress details of the claims. The employer is also prohibited from taking retaliatory action, such as firing or demoting the employee, if they do not sign the NDA in these cases.