By Alamea Deedee Bitran*
Since the disturbing details of the Harvey Weinstein scandal were released, an influx of harassment allegations have been brought to light. Yet arguably the parameters of the law remain unsuitable to address the root of the problem because of contractual barriers to victims litigating their claims in the public eye. While harassment continues to permeate the workforce, carefully crafted nondisclosure and arbitration agreements have successfully kept many victims from raising awareness by sharing their experiences. Thus, Arizona, California, New Jersey, New York, Pennsylvania, South Carolina, and Washington have proposed legislation to prohibit contractual barriers to victims exposing workplace harassment.
Below is a summary of the highlights of the trending legislation along with the positive and negative aspects of such proposed legislation. While the legislation is arguably well intentioned, it might effectuate more harm than good by forcing employers who would otherwise be inclined to settle to instead adamantly engage in prolonged vicious litigation.
The Proposed Legislation
In March 2018, the New York State Senate passed legislation which provides that no contract can contain a provision which requires that the parties submit to mandatory arbitration to resolve any harassment allegations. See SB S7848A. Under the newly passed legislation, courts would be prohibited from accepting any harassment settlements that prevent the disclosure of any factual information related to the harassment unless the condition of confidentiality is the employee’s preference.
In March 2018, the Arizona Senate and House passed legislation that prohibits public money from being used in exchange for a nondisclosure agreement that is related to harassment allegations. See HB 2020.
In March 2018, the Washington State Senate and House passed legislation which prohibits employers from requiring employees to sign agreements which prevent the disclosure of harassment as a condition of employment. See SB 5996. The legislation includes an exception which permits confidentiality provisions in settlement agreements.
In January 2018, legislation was introduced in California which would render void as a matter of public policy any provision in a settlement agreement after a lawsuit has been filed that prevents the disclosure of factual information related to harassment. See SB 820.
In January 2018, legislation was introduced in South Carolina and referred to Committee on Judiciary which provides that no agreement to arbitrate would be valid or enforceable if it requires arbitration of a sex discrimination dispute. See H 4433.
In December 2017, legislation was introduced in New Jersey that would render unenforceable as against public policy a provision in any employment agreement that has the purpose or effect of concealing details related to a harassment claim. See SB 3581. The New Jersey proposed legislation provides that a person who enforces or attempts to enforce a provision deemed unenforceable by the legislation will be liable for the employee’s reasonable attorneys’ fees.
In December 2017, the Pennsylvania Senate referred to the judiciary a bill that outlaws any agreement that restricts the disclosure of the name of any person suspected of harassment. See SB 999. The bill also prohibits any agreement that suppresses or attempts to suppress information relevant to an investigation into a claim of harassment.
The Pros of the Proposed Legislation
The clear positive aspect of the trending legislation would be that such legislation would prohibit employers from keeping harassment allegations quiet by buying their victims’ silence. The trending legislation seeks to empower and protect victims by stripping employers of the ability to contractually silence harassment allegations. The proponents of the trending legislation assert the legislation will combat harassment with increased awareness, accountability, and exposure.
The Cons of the Proposed Legislation
Notwithstanding the trending legislation’s good intentions, the negative aspects of the legislation will likely outweigh the positive aspects and the legislation will likely result in dire consequences for those that it was intended to protect.
First, employers who would have previously been inclined to quickly settle disputes will now be forced to zealously advocate prolonged expensive lawsuits in the public forum to protect their reputations from public relations disasters. Second, employees with arguably weak claims who would have previously been cut a settlement check while maintaining their privacy might be forced to litigate and ultimately lose their cases in the public eye. Third, many employees might be less inclined to come forward with allegations of harassment if those employees would be forced to file their allegations in the public record. Fourth, the portions of the trending legislation that ban arbitration arguably violate the Federal Arbitration Act and the well-established principle of the freedom to contract.
The exploration of potential additional legislative solutions to combat sexual harassment remains worth pursuing, but the current trending legislation misses the mark and will likely effectuate more harm than good. While arguably well intentioned, the trending legislation infringes on the freedom of contract and holds a litigation revolver to employers’ heads by banning devices previously used to prevent public relations debacles.
*Alamea Deedee Bitran is a business litigation and employment law attorney at Shutts & Bowen LLP in Fort Lauderdale, Florida.