How California's NDA Restrictions Cause More Harm Than Good for Survivors (Guest Column)

ONE TIME USE ONLY - No NDA, No Settlement - Illustration by Hanna Barczyk- H 2020
Illustration by Hanna Barczyk

A law designed to protect sexual assault and harassment victims from forced silence is instead removing their ability to opt for privacy — the exact opposite of its intention.

In the Feb. 19 Democratic debate, Mike Bloomberg faced calls to waive his non-disclosure agreements (NDAs) with women who had made sexual harassment claims against him. Bloomberg, and other men in positions of power or public office, should consider whether using NDAs is advisable. It's appropriate to ask them to waive those agreements or face the negative inferences that come from entering them in the first place. At the same time, women should not be forced to forgo their right to sign an NDA if they wish to keep a painful and traumatic event confidential or to avoid the ordeal of a public trial. Restrictions on this choice — such as California's recently enacted law prohibiting survivors from entering into NDAs after filing civil lawsuits — ultimately remove survivors' autonomy and deter defendants from settling.

When settling sexual assault or harassment cases, both parties often have an interest in preserving their privacy. Survivors wish to avoid public attention and criticism, the burden of a trial and the label of "victim" that can accompany such allegations. Meanwhile, defendants might be worried about their reputation and don't want claims to become public. These concerns often prompt parties to employ NDA provisions in settlement agreements that prohibit either party from discussing the survivor's allegations, the defendant's defenses or the terms of the deal.

The #MeToo movement led to an injudicious reexamination of the use of NDAs in these types of cases. Critics argue that NDAs aid repeat offenders because survivors of sexual assault and harassment are barred from telling their stories to third parties, including the media. As a result, critics claim, the public remains unaware of the danger of serial harassers. One manifestation of this criticism is legislation that bans or restricts the use of NDAs in these cases, which Gov. Jerry Brown signed into law in 2018.

Section 1001 of the California Code of Civil Procedure bans settlement provisions that prohibit "the disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action" if those claims include allegations of sexual assault, sexual harassment or workplace harassment or discrimination based on sex.

There are some exceptions. Parties may agree to keep the settlement amount private and the identity of the claimant confidential, although this exception doesn't apply if a government agency or public official is a party to the settlement. Still, section 1001 remains a blunt instrument.

Instead of empowering survivors, these paternalistic laws remove survivors' autonomy to decide whether their experiences should remain confidential. By assuming survivors lack the judgment to determine whether to enter NDAs, these laws infantilize survivors and deprive them of their agency. They deter settlements and harm the survivors they were meant to protect.

Faced with the prospect of plaintiffs continuing to speak out about alleged harassment or assault — and the harm associated with the widespread assumption that a settlement validates the initial allegations — defendants have little incentive to settle once a case is filed, even if the plaintiff ultimately wants a settlement that comes with an NDA. Without an NDA, defendants have virtually no incentive to agree to a plaintiff's request for anonymity. So while the law theoretically leaves a privacy option available, there is no reason for defendants to agree to it.

Indeed, because California's NDA restriction applies only to cases that have been filed, it may have the unintended consequence of increasing the secrecy of sexual harassment and assault cases. Survivors still can choose to settle with an NDA as long as a case is not filed. This feature of California's law curtails survivors' ability to choose to file and then settle a lawsuit and forces them to proceed with public litigation or settle without filing anything. For survivors who choose the latter option, there will be no public record that a complaint was ever made.

Furthermore, the value of a settlement to a defendant decreases significantly if a plaintiff can continue to speak out against the defendant to third parties. Defendants may instead choose to aggressively defend and litigate their case, meaning plaintiffs may not recover anything. At best, plaintiffs will be forced to endure protracted litigation during which a period of their life they may wish to keep private is litigated in the courts and the press, at significant emotional and financial expense.

California's NDA restriction was well intentioned. But in practice, it takes away survivors' ability to choose to keep their cases confidential and deters defendants from resolving disputes before trial. This harms survivors of sexual harassment and assault by removing their choice and forcing them to endure the hardship and uncertainty of a public trial as the only means of vindicating their claims.

JILL BASINGER is an entertainment litigation partner, and MICHAEL L. SMITH is an associate at Glaser Weil in Los Angeles.

A version of this story first appeared in the Feb. 26 issue of The Hollywood Reporter magazine. Click here to subscribe.