Mike Bloomberg has said he will release former NDA employees. That’s why you should think twice before signing one

Former New York Mayor Mike Bloomberg promised Friday to release former women addicted to nondisclosure agreements, days after Senator Elizabeth Warren of Massachusetts hammered him for silence agreements in the Democratic presidential debate in Las Vegas.

The billionaire said in a statement that his namesake company had identified three non-disclosure agreements signed with women for over three decades “to respond to complaints about the comments they said I had made.” Those women would have been released from the confidentiality agreements if they had contacted the company, she said.

“I have been thinking a lot about this issue in the past few days and have decided that as long as I manage the company, we will not offer confidentiality agreements to resolve the claims of sexual harassment or illicit behavior ahead,” said Bloomberg.

“I recognize that NDAs, particularly when used in the context of sexual harassment and sexual assault, promote a culture of silence in the workplace and contribute to a culture of women who do not feel confident or supported,” he added. “It is imperative that when problems occur, the workplace does not address only specific accidents, but the culture and practices that led to these accidents. And then leaders have to act. “

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Reported on lawsuits alleging that the billionaire had created a hostile working environment in his company with sexist comments, former employees told the store that they could not speak publicly due to confidentiality agreements and worrying concerns. Bloomberg, who at the time refused to free women from those agreements, denied the charges in the lawsuits.

On Wednesday, after the moderators of the debate raised Bloomberg’s past remarks on women, the businessman said he had “no tolerance for the type of behavior that the #MeToo movement has brought to light” and has highlighted various women who had placed in leadership positions in his company, foundation and city government.

Warren, in turn, focused on NDAs.

In some cases, silence agreements will include non-denigration clauses that prevent someone from saying negative things about other people who signed the agreement.

“What we need to know is exactly what is hiding out there. It has gotten a number of women, dozens, who knows, to sign non-disclosure agreements for both sexual harassment and gender discrimination in the workplace,” he said. “So, Mr. Mayor, are you willing to free all those women from those non-disclosure agreements so you can hear their side of the story?”

Bloomberg replied that “there were very few non-disclosure agreements”, without specifying an exact number.

“None of them accuse me of doing anything, apart from maybe they didn’t like a joke I said,” he said. “There are agreements between two parties who wanted to keep silent and it depends on them. They signed those agreements and we will live with it.”

Bloomberg’s confidentiality agreements are far from the first to attract national attention. The controversy involving President Trump’s alleged relationship with adult film star Stormy Daniels focused largely on the payments he was receiving from Trump’s personal attorney Michael Cohen. The deal would have prevented her from publicly discussing their relationship.

Trump denied the affair and said he was unaware of the payment at the time, although the president made conflicting statements about the scandal.

Many women also claimed that they were required to sign non-disclosure agreements as part of the settlements reached with Harvey Weinstein in connection with allegations of sexual harassment and harassment. Olympic gold medalist McKayla Maroney also said he signed one as part of an agreement following sexual abuse by US gymnastics team doctor Larry Nassar, who was convicted of sexual abuse and child pornography allegations and sentenced to 125 years in prison.

Here’s what employees and voters need to know about these deals:

What are non-disclosure agreements and how do they work?

These types of deals can go by many names, said Donna Ballman, an employment attorney and author of the book “Claim Yourself Without Getting Fired.” “Non-disclosure, silence, confidentiality – no matter what you call it, it’s probably the same thing,” Ballman said.

Agreements generally prevent one or more parties from disclosing the terms of a transaction. In general, they will describe what information a person can and cannot discuss publicly and for what period of time the agreement is valid.

A forced arbitration clause is a clause that establishes that disputes should be resolved by private and confidential arbitration rather than being transmitted to a public court.

In some cases, silence agreements will include non-denigration clauses that prevent someone from saying negative things about other people who signed the agreement, Ballman said.

While the most recent examples have involved cases of sexual harassment or assault, they can be used for a variety of settlements. Ballman said that consumers are most likely to meet them in product liability agreements or as part of severance packages.

Start-ups and inventors can use these agreements to prevent them from disclosing proprietary information, while researchers can employ them among study participants. Public figures can use them for domestic staff, including cleaning ladies and even babysitters.

What should you know before signing a non-disclosure agreement?

For beginners, be wary of an excessive deal, labor lawyer Debra Katz previously told MarketWatch. If a non-disclosure agreement seems less of an effort to protect company confidential information, and more geared to muzzling the employee from talking about improprieties, this should raise a red flag, he said.

Another warning sign, according to Katz: “Agreements that go on forever, so that the employee can leave and for the rest of his life he can never say anything negative about that employer.”

A non-disclosure agreement that prevents an employee from making requests for discrimination or illegal harassment to the Commission for equal employment opportunities or to the SEC would be inapplicable.

Check the provision for damages cleared by the NDA, Katz added. The liquidated damages specify an amount in cash that the employee must pay for violating a non-disclosure agreement, he said, and no reasonable attorney should advise his client to accept a provision that is seriously disproportionate to the settlement amount.

Look for a forced arbitration clause, or a clause that requires disputes to be resolved by private and confidential arbitration rather than being publicly transmitted to a court, Employment Lawyer Paula Brantner, president and director of PB Work Solutions, in previously called MarketWatch. Employees are less likely to win in mandatory arbitration than litigation, according to a survey conducted by Cornell University lawyers in 2014.

Verbal agreements don’t matter, Brantner said, so if the written agreement departs from what you’ve been told, clarify the discrepancy. A non-disclosure agreement that prevents you from making requests for discrimination or illegal harassment to the Equal Employment Opportunity Commission or the Securities and Exchange Commission would be inapplicable, Katz said, so complaining to the authorities is still fair game .

What happens when you break one?

In Daniels’s case, the adult film actress seemed to want to get the deal to tell her story. But experts at the time suggested that Daniels’ approach may not be particularly fruitful for the average consumer.

Daniels, whose real name is Stephanie Clifford, claimed that the NDA was not valid because Trump himself had not signed it; only Michael Cohen, Daniels and Trump’s attorney, had signed it.

His March 2018 suit against Trump and Cohen to invalidate the NDA was expelled from the federal court by a judge in March 2019; the judge said there was nothing left to discuss as the president’s attorneys had already said they would not ask Daniels for penalties for breaking the NDA.)

“This is rarely considered a real defense because most employers will quickly produce a signed copy,” said Ballman. “But if there was a violation on the other side, this could mean that she is no longer obliged to respect.”

First, breaking one of these agreements often has financial implications – and many agreements will have specific “damage settlement” clauses, Ballman said. If someone entered into a non-disclosure agreement as part of an agreement, the interested party could sue for money back and possibly for further damages.

Daniels, his then lawyer Michael Avenatti told CNN, would have been threatened with a $ 1 million fine for each appearance in connection with the alleged affair.

In some states, violation of a confidentiality agreement means that the non-defaulting party no longer has to follow the directives of the agreement. Violation of a non-disclosure agreement may result in dismissal if it is part of an employer contract. In rarer cases, it can result in prison if a court finds that the violation constitutes theft of proprietary information.

Should I avoid signing a silence agreement?

The Weinstein scandal has prompted many to question the use of non-disclosure agreements, particularly in the context of sexual harassment.

Consumers should be aware of their rights before signing these agreements. The National Labor Relations Board believes that non-denigration provisions that prohibit employees from publicly criticizing a company’s executives are an unfair labor practice. Federal civil rights law replaces settlements that try to prevent someone from filing a sexual harassment complaint, which means that you may still be able to file a sexual harassment complaint even if you have signed a non-disclosure agreement.

Ultimately, a consumer should seek legal advice and carefully evaluate what information should remain confidential under this agreement and what effects it could have.

“Contrary to NDAs that allow parties to do business together or protect property rights, harassment-hiding NDAs retain crucial information from the profession and the public,” wrote Annie Hill, assistant professor at the University of Minnesota, regarding to Weinstein’s accusations.

This story was originally published on February 20, 2020 and has been updated.

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