Non-Disparagement Provision Violates Public Policy
The New Jersey Supreme Court held that a non-disparagement provision in a settlement agreement in a matter involving sex discrimination, harassment and retaliation violated public policy.
From the case headnotes
In this appeal, the Court considers whether a “non-disparagement provision” in a settlement agreement can stop parties from revealing details relating to claims of discrimination, retaliation, or harassment.
Plaintiff Christine Savage began her career as a police officer with the Neptune Township Police Department in 1998. In December 2013, she filed a lawsuit against the Department, the Township of Neptune, and others for sexual harassment, sex discrimination, and retaliation, contrary to the Law Against Discrimination (LAD). The parties entered into a settlement agreement in 2014. Savage filed a second action in April 2016 against a number of the same defendants, alleging that they had violated the settlement agreement and engaged in continuing– and “intensified” — sex discrimination, harassment, and retaliation.
The parties entered into another settlement agreement in July 2020. Paragraph 10 of the agreement requires in part that the parties agree not to make or cause others to make any statements “regarding the past behavior of the parties” that “would tend to disparage or impugn the reputation of any party. The parties agree that this non-disparagement provision extends to statements, written or verbal, including but not limited to, the news media, radio, television, . . . government offices or police departments or members of the public.”
A television news show aired a story about the case and an interview with Savage in August 2020. Defendants contend that Savage violated the nondisparagement provision of the settlement agreement during the interview both through comments she made, such as “you abused me for about 8 years,” and comments by the interviewer, such as “Savage says the harassment and retaliation intensified with bogus disciplinary charges.”
Defendants filed a motion to enforce the second settlement agreement. The trial court granted the motion, finding that the LAD barred only non-disclosure and confidentiality agreements and that Savage instead violated a non disparagement clause. The Appellate Division affirmed in part and reversed in part. 472 N.J. Super. 291, 314 (App. Div. 2022). Relying on the definitions of non-disclosure and non-disparagement provisions set forth in Black’s Law Dictionary, the appellate court found the parties’ non-disparagement clause enforceable but held that Savage had not violated it.
Key holdings
Through N.J.S.A. 10:5-12.8(a), a section of the LAD that was enacted in the wake of the “#MeToo movement,” the Legislature removed barriers that previously made it difficult for individuals to report abuse. Survivors of discrimination, retaliation, and harassment now have a legal right to tell their story– a right that cannot be taken away by a settlement agreement. Because the scope of the agreement in this case would bar individuals from describing an employer’s discriminatory conduct, the agreement encompasses speech the LAD protects. The non-disparagement clause in the agreement is against public policy and cannot be enforced…
Paragraph 10 of the settlement agreement uses expansive language that encompasses speech about claims of discrimination, retaliation, and harassment. The scope of the agreement — barring all statements that would tend to disparage a person — is quite broad. It would prevent employees from revealing information that lies at the core of what section 12.8 protects — details about claims of discrimination. In that way, the agreement directly conflicts with the LAD. The carveout at the end of paragraph 10 does not save the agreement. The last sentence states that “testimony or statements of Plaintiff related to other proceedings including lawsuits” is not precluded. Section 12.8’s protections, however, extend beyond statements made in pleadings or courtrooms. Survivors of discrimination and harassment have the right to speak about their experiences in any number of ways, and they can no longer be restrained by confidentiality provisions in employment contracts or settlement agreements.
The court remanded with guidance for the further proceedings. (Mike Frisch)