Breaking the Silent Treatment The Contractual Enforceability of Non-Disclosure Agreements for Workplace Sexual Harassment Settlements

Abstract

The dramatic revelations of the #MeToo movement have ex- posed the extent to which workplace sexual harassment is en- demic and concealed across different industries. #MeToo has also shed light on the use of non-disclosure agreements (“NDAs”) by harassers to conceal their pattern of repeated mis- conduct. While there has been strong public condemnation of NDAs in the wake of the #MeToo movement, there is limited case law on the question of whether contracts such as NDAs are legally enforceable when used to settle claims of sexual har- assment that do not amount to criminal conduct.

While federal and state legislatures continue to debate the benefits of legislating against such agreements, this Note ana- lyzes the viability of the common law public policy analysis to hold such NDAs unenforceable. Given that most states do not have specific statutes directly addressing sexual harassment NDAs, courts should look to a broad range of state legislation as relevant in considering the public policy interests counseling toward finding such NDAs unenforceable. Accordingly, this Note analyzes public policy considerations derived from three types of state law: restrictions on the use of NDAs in instances of sexual harassment, prohibitions of workplace harassment, and limitations on the concealment of public hazards.

Even in states without any such legislation, this Note urges state courts, when determining whether to enforce sexual har- assment NDAs, to more actively weigh the benefits of enforcing the contractual will of private parties against potential harms to the public welfare. Workplace sexual harassment is a public policy issue that is worsened by the continued use of NDAs. In concealing workplace sexual misconduct, NDAs prevent soci- ety, through private and state actors, from addressing the problem itself and threaten public safety and welfare by allow- ing offenders to potentially harm future workers. Without NDAs as protection, companies will be exposed to reputational damage and potential shareholder litigation when sexual har- assment news becomes public knowledge. Indeed, this threat of future reputational harm could be an effective way to encour- age corporations to change their internal policies relating to workplace misconduct.