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Recent events further support ditching secret settlements

Recent events further support ditching secret settlements

We’ve criticized confidentiality agreements (otherwise known as secret settlements or “hush money” deals) for years. Several months ago, this blog discussed how confidentiality agreements allowed Harvey Weinstein to continue his abusive behavior for years.

Now a Pennsylvania grand jury has come out with a deeply troubling report about abuse in the Catholic Church. The report describes decades of abuse in Pennsylvania committed by priests and covered up by church officials. It contains the following recommendation:

We need a law concerning confidentiality agreements. They've become a hot topic in recent months in sexual harassment cases - but it turns out the church has been using them for a long time. [Church] records contained quite a few confidentiality agreements, going back decades: payouts sealed by silence. There are arguments on both sides about whether it's proper to use these agreements in securing lawsuit settlements. But there should be no room for debate on one point: no non-disclosure agreement can or should apply to criminal investigations. If the subject of a civil lawsuit happens also to concern criminal activity, then a confidentiality agreement gives neither party either the right or the obligation to decline cooperation with law enforcement. All future agreements should have to say that in big bold letters. And all this should be enacted into a law.

We couldn’t agree more. It’s become painfully obvious that confidential settlements have allowed sexual predators to get away with illegal and downright horrifying behavior. No one can argue with a straight face anymore that the benefits of this practice outweigh the harms.

Even the issues surrounding Donald Trump’s payment to adult film actress Stormy Daniels arise from confidentiality. The payment itself would not have been illegal - except that everyone involved in making the deal failed to report it. Whatever one thinks about President Trump or the entire situation, it’s just one more example of how hush money settlements create problems in criminal and civil law.

There are certainly cases where the parties might want to keep the amount of a settlement confidential. An abused person might, for example, just not want opportunistic friends to know they received six or seven-figure money. An agreement on that point isn’t a problem if it’s freely negotiated between the parties. The problem is that many confidential agreements are much broader: they impose gag orders prohibiting discussion of the conduct which caused the case to be brought.

One might reasonably ask why the law on confidential settlements hasn’t been reformed already. The regrettable answer is that many wealthy and powerful people - including corporate executives, high-ranking clergy, and rich individuals - like being able to buy silence. At this point, however, we’ve seen enough abuse to know that their desire to pay for secrecy can cause great societal and legal harm. It also tilts the legal playing field in favor of the rich and well-connected, giving them yet another advantage over less wealthy adversaries.

The time has come to place legal limits on confidentiality for legal disputes. If Congress won’t take up the issue, then the individual states need to step up. Otherwise, some of the most shocking forms of sexual abuse, along with other criminal or otherwise repugnant behavior, will continue to get swept under the rug.

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