Speaker 1: You're listening to Bloomberg Law. I'm Greg's store with June Grasso.
Speaker 1: In Harvey Weinstein agreed to pay actress Rose McGowan a
Speaker 1: hundred thousand dollars. The accord settled her claims over a
Speaker 1: hotel room incident she has since described as rape. It
Speaker 1: also bought McGowan silence, silence that helped Weinstein stay in
Speaker 1: his purchase one of Hollywood's most powerful movie producers for
Speaker 1: the next two decades. With more than forty women now
Speaker 1: accusing Weinstein of sexual harassment or assault, that type of
Speaker 1: nondisclosure agreement is getting renewed scrutiny. Some people are asking
Speaker 1: whether they do more harm than good when it comes
Speaker 1: to sexual improprieties, perhaps even covering up criminal activity. With
Speaker 1: us to talk about the subject is Rebecca Greenfield. She's
Speaker 1: a Bloomberg News reporter and the host of the Bloomberg
Speaker 1: game Plan podcast. Rebecca, thanks for joining us um in
Speaker 1: your UM. In your recent story on the subject, you
Speaker 1: talk about how nondisclosure agreements come in several different flavors,
Speaker 1: but with regard to um sexual harassments, settlements give us
Speaker 1: a sense of what they typically include, So thanks so
Speaker 1: much for having me. Yeah, So what often happens is
Speaker 1: that you will have alleged harassment and you might want
Speaker 1: to sue, but instead you will settle, and a part
Speaker 1: of the deal of the settlement is that you sign
Speaker 1: a non disclosure agreement saying that you won't talk about
Speaker 1: any of the facts that happened. And this is this
Speaker 1: is common. I mean, this is not just harv Weinstein
Speaker 1: that's using these. These are very common in sexual harassment cases.
Speaker 1: It's hard to know how common because we can't talk
Speaker 1: about it, but usually that is what the agreement looks like.
Speaker 1: They're also common in a lot of civil litigation. And
Speaker 1: part of the reason for making many of these settlements
Speaker 1: out of court is keeping the case out of the
Speaker 1: courtroom and out of the public. So the question is
Speaker 1: would there be these kinds of settlements if not for
Speaker 1: these non disclosure agreements. Yeah, I mean, I think some
Speaker 1: people want to settle, they want some sort of money
Speaker 1: for their their problems, and might not want to talk
Speaker 1: about it. I think people who do want to talk
Speaker 1: about it, Yeah, they're not going to have they're not
Speaker 1: going to go into this non disclosure agreement. But yeah,
Speaker 1: without the settlement, you're not going to get the agreements
Speaker 1: one kind of goes with the other. So if somebody
Speaker 1: signs a nondisclosure agreement in this context, what does it
Speaker 1: prevent them from doing? Specifically? For example, would somebody be
Speaker 1: able to talk to prosecutors who are looking into criminal
Speaker 1: allegations or talk to the UH Equal Employment Opportunity Commission
Speaker 1: UH looking into a not perhaps that particular case, but
Speaker 1: but a broader practice involving a person or a company. Yeah,
Speaker 1: with regards to sexual harassment allegations, the NDA can't prevent
Speaker 1: you from talking to law enforcement or from filing with
Speaker 1: the e o C. I think that these agreements still
Speaker 1: have a way of killing people from doing that. And
Speaker 1: in my reporting, a lot of people don't know that
Speaker 1: that is something that you can't do, but it's it's
Speaker 1: really shouldn't prevent you from working with law enforcement. Um.
Speaker 1: There was an NDA that I did see that tried
Speaker 1: to make it so that if you talk to you
Speaker 1: can you could talk to law enforcement or the e
Speaker 1: o C, but you couldn't talk to a third party
Speaker 1: about those things. UM. So you could see how that
Speaker 1: would also have a chilling effect on what you can
Speaker 1: and can't talk about. Rebecca, I don't recall any court
Speaker 1: cases where someone violated confidentiality clause and the other side
Speaker 1: brought them to court. Have have you heard of any?
Speaker 1: So I talked to a lot of lawyers about this.
Speaker 1: It does happen, but I think what it's more the
Speaker 1: threat of the lawsuit that stops people from doing that.
Speaker 1: I mean, if you're a single person going up against
Speaker 1: a company, a company has so any more resources and
Speaker 1: they're gonna say you broke this contract and threaten you
Speaker 1: with the lawsuits. So I think that is probably what
Speaker 1: happens more often it's the threat of the lawsuit. Um.
Speaker 1: But I did have one experts showed me that that
Speaker 1: a a court had found that someone had violated a
Speaker 1: confidentiality agreement. But even in that settlement, it was unclear
Speaker 1: how much money the person out in the end. So
Speaker 1: it's kind of like the end of the lawsuit. You know,
Speaker 1: it's not as um, you might not have to pay
Speaker 1: as many damages as you think you might have to
Speaker 1: a lot of people think that you have to pay
Speaker 1: back your whole settlement. Really, a court, I was told,
Speaker 1: would wouldn't really find that to be a realistic penalty
Speaker 1: for breaking one of these But of course, you're gonna
Speaker 1: end up paying so much more in time, money, reputation
Speaker 1: if you have to go to court for a lawsuit
Speaker 1: over breaking something. So you have to wagh if it's
Speaker 1: really even worth it. Rebecca, what are we seeing in
Speaker 1: terms of efforts to bar NDAs at least NDAs that
Speaker 1: prevent victim of sexual harassment and assault from from speaking out. Yeah. So,
Speaker 1: right after these Weinstein revelations came forward, um to New
Speaker 1: York state lawmakers introduced legislation to avoid any contract that
Speaker 1: includes a provision to silence workers about harassment or discrimination.
Speaker 1: It's still really early on in the process. He said
Speaker 1: that the legislator doesn't even meet until January. But I
Speaker 1: think that they're hoping to ride this wave of publicity
Speaker 1: and anger over what nondisclosure agreements can do. Weinstein had
Speaker 1: two kind of kinds of n d as he had,
Speaker 1: accorded to The New York Times. He had the ones
Speaker 1: that we're talking about in settlements, and then he also
Speaker 1: had one that his employees, uh were sawn were required
Speaker 1: to sign it. Tell us about that the last the
Speaker 1: employee one. So yeah, nd as, as, as mentioned come
Speaker 1: in so many different flavors and even we've seen with
Speaker 1: the Trump administration, he has everybody signed n d as,
Speaker 1: So it's not an uncommon practice. I'm sure anybody who's
Speaker 1: worked at a company knows you usually sign an n
Speaker 1: d A. Often it's supposed to protect trade secrets, which
Speaker 1: the courts are pretty strong on. They don't they will
Speaker 1: you know, you shouldn't sell your company's trade secrets. Um,
Speaker 1: But I think again they are used in this way
Speaker 1: that also scares people into thinking they can't talk about anything,
Speaker 1: and that is not going to be found to be enforceable,
Speaker 1: I'm told, but it doesn't really matter because it has
Speaker 1: this power and effect. Just you signing a document, you
Speaker 1: think you're you can't break. You sign something, you can't
Speaker 1: break it. So so I think that's that's the kind
Speaker 1: of employee n d A that we see. But I
Speaker 1: just want to circle back to something that that June
Speaker 1: asked about earlier. But, Um, isn't there wouldn't isn't there
Speaker 1: concerned that if nondisclosure agreements are barred that it will
Speaker 1: make it harder for a victim of sexual harassment or
Speaker 1: sexual assault to get a settlement. I mean, she feels
Speaker 1: like she's a victim. She uh, you know, wants compensation
Speaker 1: for it, and she has to work read that, Um
Speaker 1: it will become public. Will that not make her less
Speaker 1: likely to settle that case? You know, I'm not sure
Speaker 1: the answer to that because we just don't know yet.
Speaker 1: But I understand the argument, Um, why would an employer
Speaker 1: give you money if they're not getting anything in return?
Speaker 1: So so yeah, that's a question that definitely people who
Speaker 1: are advocating for for fewer n d as I think
Speaker 1: you need to grapple with just in about thirty seconds.
Speaker 1: Is this case bringing up things that people and when
Speaker 1: you're talking to people that people didn't realize before about
Speaker 1: these indias, they may think twice before they sign them. Now.
Speaker 1: I think that the lawyers I talked to have been
Speaker 1: dealing with this for a really long time. I think
Speaker 1: people reading the story now realize that not everything you
Speaker 1: sign is necessarily as enforceable as you think it is.
Speaker 1: But I mean, I don't see it changing really anytime soon.
Speaker 1: But but I mean these out that there are a
Speaker 1: lot of allegations and a lot of conversations, So so
Speaker 1: maybe the NDA will get another look. I want to
Speaker 1: thank Rebecca Greenfield, Bloomberg News reporter and host of the
Speaker 1: Bloomberg game Plan podcast for talking to us about nondisclosure
Speaker 1: agreements in the context of sexual harassment settlements and in particular,
Speaker 1: Harvey Weinstein. That's it for this edition of Bloomberg Law.
Speaker 1: We'll be back tomorrow thanks to our technical director, Director
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