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Can an NDA Require Confidentiality Regarding Sexual Harassment?

The #MeToo movement has forever changed the way we look at sexual harassment in the workplace. It has also shed light on a practice many Americans may not know of — the use of non-disclosure agreements (NDAs) to silence alleged victims.

An NDA is a contract that restricts one party from sharing another’s confidential information. Many employers require new employees to sign NDAs to protect trade secrets and other proprietary data. Depending on how “confidential information” is defined, an NDA may cover details about alleged sexual harassment.

Some employers include NDAs in out-of-court settlement agreements with employees who claim to have suffered sexual harassment at their company. As a condition of compensation, these settlement agreements typically require silence about the alleged harassment, for which no admission of liability is made.

Settlement agreements may also include such conditions as:

  • Non-disparagement provisions — The employee is restricted from making negative statements about the harasser or the company.
  • Non-cooperation provisions — The employee agrees not to help other people who may be pursuing litigation against the employer.
  • Affirmative statements — Some settlement agreements go so far as to require the employee to make positive statements about the other party.

The legal enforceability of an NDA that requires confidentiality about instances of sexual harassment varies depending on the specific circumstances. When the alleged harassment, if proved, would constitute a criminal offense such as sexual assault, courts have consistently held that an NDA requiring silence about the incident is unenforceable.

Even if sexual harassment does not rise to a criminal level, an NDA may be unenforceable. There are broad state and federal protections that ensure employees have the right to report workplace harassment. For example, the National Labor Relations Act forbids employers from preventing workers from discussing sexual harassment complaints in the workplace. Similarly, Title VII of the Civil Rights Act, which prohibits workplace sexual harassment, invalidates settlement agreements that restrict victims from filing charges with the Equal Employment Opportunity Commission (EEOC) or cooperating with the EEOC in investigating accusations of sexual harassment.

However, the law is less clear about the validity of NDAs requiring public silence on non-criminal sexual harassment. Courts will generally enforce confidentiality provisions if they are reasonable. However, a court can invalidate an NDA if an employee’s interest in disclosure outweighs the damage to a person’s or company’s reputation that could result. A non-disclosure provision may also be unenforceable if it goes against public policy, such as where there is a continuing pattern of harassment that puts other people in jeopardy.

The lack of clarity regarding NDAs as concerns sexual harassment makes this area of law difficult for both employees and employers to navigate. The Law Office of Paul R. Clevenger advises clients on non-disclosure agreements in Dallas and throughout Texas. I welcome inquiries from businesses and employees. Please call 469-212-9764 or contact me online to arrange a consultation.

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