NBCUniversal Says Women Are Not Silenced by NDAs, But Payout Terms Stay Secret

Farrow Maddow MSNBC - H - 2019

What these former employees are not free to talk about are the terms of their separation from the company, including the dollar amount they received.

Confidentiality and non-disparagement clauses in separation agreements have come under fire during the #MeToo movement as powerful mechanisms for silencing women and perpetuating predatory behavior. So on Friday, when Rachel Maddow on her MSNBC program touted “some news” appearing to confirm that NBCUniversal had released former employees with harassment claims from such agreements, it naturally made headlines.

The language in the statement — a qualified release on issues of “sexual harassment,” but not discrimination or assault, and asking employees to “contact NBCUniversal” to secure a release — prompted an immediate backlash.

“It was a bit disingenuous to ask people who have entered into confidentiality and non-disparagement agreements to have to contact NBC to be released from that rather than just saying anyone who has signed an NDA for harassment or discrimination claims is released from all obligations," observes Douglas Wigdor, a New York attorney who specializes in harassment and discrimination cases and who has represented individuals with claims against Fox News and Harvey Weinstein.

In fact, the statement did not represent a new policy at NBCUniversal. A legal source at NBC told The Hollywood Reporter weeks ago that women who have signed such separation agreements have always been free to tell their stories about sexual harassment. The source was speaking about agreements with women who have raised complaints about Matt Lauer, including Brooke Nevils, whose November 2017 human resources complaint triggered Lauer’s firing and who tells her story in Ronan Farrow’s new book Catch and Kill. NBCUniversal reached an agreement with a second woman who complained about Lauer; she has not made her story public. What the women are not free to talk about are the terms of their separation from the company, including the dollar amount they received. 

In fact, employment law and IRS rules have shifted in the wake of #MeToo to bolster protections for claimants and in some states prevent companies from paying for silence. The federal tax law, which took effect at the beginning of 2018, discourages confidentiality clauses in sexual harassment and discrimination settlements by prohibiting employers from deducting the payout or attorney’s fees in agreements where there is a confidentiality clause attached to a claim. (If the complainant requests a confidentiality agreement, they may still deduct their own attorney’s fees.)

“It didn’t receive all that much attention,” adds Wigdor, of the change to the IRS rule. “As a result, some employers did away with NDAs because they wanted to still take a tax deduction.”

State laws also have targeted the legal mechanisms that gag complainants. California banned confidentiality clauses in settlement agreements involving sexual assault, sexual harassment or sex discrimination. Last year, then California Gov. Jerry Brown signed the law, known as the STAND (Stand Together Against Non-Disclosure) Act. It went into effect on Jan. 1. New York also instituted new measures last year that expanded anti-sexual harassment protections statewide, including banning mandatory arbitration clauses for sexual harassment claims in employment agreements and other contracts. Also, settlements of sexual harassment claims may not include non-disclosure provisions unless the complainant prefers to include the provision.

“#MeToo has really changed the playing field,” notes Ann Fromholz, whose California-based firm specializes in employment law. “Before the #MeToo movement and the backlash against these settlement agreements, it was almost universal that confidentiality agreements covered the terms of the agreement but also the facts of the complaint.”

She adds that confidentiality clauses covering the terms of the agreement are still commonly accepted. “A company wouldn’t want people to talk about how much money they got for fear that that will make other people think they can get a lot of money for bringing that kind of claim,” Fromholz says.

And mutual non-disparagement agreements are still widely used — at the behest of both employers and employees. In large companies like NBCUniversal, which has thousands of employees, many of them in very public-facing positions, the non-disparagement language typically covers named individuals.

Nevils revealed to Farrow that a non-disparagement clause in her separation agreement with NBC News covers NBC News chairman Andy Lack and NBC News president Noah Oppenheim; the executives have mounted an intense push-back on the claim in Farrow’s book that his Harvey Weinstein reporting was quashed in part to keep embarrassing details about Lauer from coming to light.

“There are often non-disparagement clauses in these cases,” adds Fromholz. “It’s different than confidentiality, it says you can’t say bad things about the company or specific people in the company. A lot of people don’t like non-disparagement agreements. But they’re not prohibited yet.”