Pennsylvania State Senator Judy Schwank (D-Berks) introduced a bill that would prohibit non-disclosure clauses on sexual harassment settlements. If her bill becomes law, settlements that restrict "the disclosure of the name of any person suspected of sexual misconduct," would become illegal.

Her goal is to stop predators and those who protect them. Surely she is thinking of cases like Harvey Weinstein, where huge swaths of his company and the community knew he was a sexual predator and helped him cover up. 

This sounds noble, but it would be a disaster for Pennsylvanians who are the victims of sexual harassment.

You may have thought it would be a disaster for the perpetrators, and it would be, but they aren't exactly a group deserving of sympathy. Why would it be bad news for victims? Here are a few reasons.

Why Settle?

Companies often settle because it's cheaper to settle than to fight it out in court. Fighting a court battle is extremely expensive and you can never be sure which side will come out victorious. No matter what happens, if the news picks up on it, your company name gets dragged through the mud

So, many companies do the logical thing--pay a sum of money to the plaintiff in agreement for everyone keeping their mouths shut. If it becomes illegal to require closed mouths in exchange for the money, you've just decreased the motivation. If you pay someone $50,000 in exchange for a non-disclosure/non-disparagement clause, how much will you be willing to pay to settle the same case where the complainant is legally able to disclose and (by virtue of disclosing) disparage? Chances are, it will be a lot less than $50,000.

Non-Disparagement Goes Both Ways

While I'm not a lawyer, I've been involved in thousands of terminations where non-disparagement clauses were standard. These clauses say (in plain English), "we agree not to say anything bad about you and you agree not to say anything bad about us." 

Without these clauses, companies lose the motivation to be kind to the suing employee. While it may seem that this is not a big deal, victims have something to lose by going public as well. All things being equal, you might be hesitant to hire someone who has sued before. In order to win a civil lawsuit you generally only have to prove that it was more likely than not that the harassment took place. Lots of companies do not wish to hire someone who has sued before for fear that they might sue again. 

Right now, it's pretty standard for these non-disparagement clauses to say that the company will only confirm dates of employment and job titles, or in some cases, a carefully worded letter of recommendation is included, or the number of people who are authorized to give a reference is limited. This is done to protect the victim as well as the company. This protection goes away.

Cases Are Not Always Black and White

Sexual harassment cases often boil down to he said/she said situations. There are not a lot of witnesses. Sometimes a relationship that starts out as consensual ends up as sexual harassment when one person wants to end the relationship. Sometimes both employees have behaved in questionable ways at the office. It's often cheaper and easier to settle these cases than fight them, even if there's a good chance that the complainant wouldn't prevail in court. 

Remember, in a court case, the company won't hold back in looking into the complainant. That may discourage people from coming forward.

A Huge Cost for Victims

Employment attorney Marc Alifanz says:

While I understand the objective behind the legislation, a huge part of the reason companies will agree to settle such cases at all is the confidentiality aspect. They are, in part, buying the avoidance of publicity of something that hasn't been proven. While there are certainly other factors to consider (cost of litigation, etc), I think this would have a chilling effect on settlements and put more plaintiffs to their proof. That would prolong the process and possibly end with them getting less, or nothing at all, actually hurting the people this legislator is trying to help. Bad idea.

In reducing the chances of a settlement and increasing the chance of heading into costly court cases, victims without huge pocketbooks or a rock solid case will have a difficult time paying for an attorney. This inadvertently protects big businesses against the individual. 

Keep the Government Out of It

Employment attorney Eric Meyer (who brought this case to my attention) points out that in these settlements, both sides are represented by an attorney and that should be sufficient. He writes: 

Look, I'm all for taking measures to reduce the risk of sexual harassment in the workplace. And this bill may be well intended, but it goes too far. When two sides agree to resolve a workplace dispute at arm's length -- especially when both sides are represented by counsel -- the government should stay out of their lane.

I'm inclined to agree. 

Published on: Nov 20, 2017