David I. Brody quoted in Massachusetts Lawyers Weekly on non-disclosure provisions in settlement agreements
David I. Brody, partner in the firm’s Employment Department, was quoted in the April 24th issue of Massachusetts Lawyers Weekly. The article, “Legislature mulls nondisclosure agreements — again,” discusses a bill under consideration by the Legislature that would restrict the use of nondisclosure agreements (NDAs) in the settlement of employment cases involving sexual assault and discrimination.
Read the full article from Massachusetts Lawyers Weekly (subscriber content).
From the article:
“Some of the components of the bill were done in a very effective way, including a private right of action to enforce and protections for individuals who may want to remain anonymous,” said Brody, president of the Massachusetts Employment Lawyers Association.
Brody sees NDAs in the employment sector as particularly problematic.
“The payments in these settlement agreements are designed to make people whole, to place people in the position they would have been had they not been discriminated against or harassed,” Brody said. “To put nondisclosure or nondisparagement as a condition of being made whole is particularly offensive to some people. I see that a lot. If we as a community want to say that, absent certain exclusions, that’s something we find to be against public policy, I can get behind that.”
On the other hand, Brody said he recognizes that some clients are willing to trade silence for an increased settlement package.
“And there are any number of employers who are willing to pay for that post-agreement restriction,” Brody said. “So there is a school of thought out there that if you make nondisclosure against public policy, you may make some deals harder to reach.”
Brody sees much the same problem in public sector settlements, though he thinks the problem is manageable.
“In a public setting, it’s highly unlikely that you are going to be able to keep an agreement like that confidential,” Brody said. “But that doesn’t mean that an individual cannot condition their settlement on certain restrictions about what they say. While the employer needs to understand that those facts may get out, if they come out through the mouth of the individual [plaintiff], that still may be a basis for [the employer to claw back] the settlement. So the risk for the employee is still there.”