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Int’l Women’s Day 2018: Non-disclosure agreements silence victims and enable sexual predators

By Beau Lefler

Repeat sexual assault and harassment offenders use lawyers and legal tools to legally silence their victims, enabling them to continue to commit crimes. We, the public, should not let this happen.

A non-disclosure agreement, or NDA, is a common contract used in many situations. In its basic form, it is legal obligation to keep specific information confidential. Companies use it to prevent employees from stealing trade secrets or to let potential investors investigate the company before they invest capital. Information is valuable, and NDAs allow owners of information to retain control of that value.

non disclosure agreements

Photo: Carolyntiry, via Flickr.

NDAs are also common in settlement agreements, where two parties to a lawsuit (or potential suit) agree to settle their differences before a judge decides. A common scenario is when one person or company injures another person. The injury can be caused by accidental or intentional acts, and sometimes it can even involve criminal behavior such as assault. The settlement often involves the exchange of money. The injured person receives money in return for agreeing to stop or never start a lawsuit. The injured person also agrees to not disclose the compensation to anyone, or that there was ever an injury in the first place. There are stiff monetary penalties in the NDA to ensure that the victim does not talk.

A settlement instead of a court judgment is often seen as a superior route because the parties avoid the time, money, public exposure and distraction involved in a lawsuit, and because it saves public money by reducing judicial caseloads. Because settlements are favored over court judgements, processes that promote settlements are generally seen as good. NDAs incentivize settlements because, among other reasons, they allow the injuring party to compensate the injured person without public knowledge, and often for a lower amount that might be won in a court judgement.

sexual harassment

File photo: HKFP/Catherine Lai.

Receiving compensation for an injury without the public knowing can sometimes be good for victims as well. It allows them to avoid publicity about their injury, and it can also eliminate the risk that after a lengthy and costly legal fight they might receive no compensation.

However, allowing people or companies to injure other people, and then compensate them without anyone ever knowing about it, has substantial drawbacks. Most importantly, it has the potential to allow someone with the financial resources to repeatedly injure other people, provide enough compensation to induce settlement, and then silence the victims.

Harvey Weinstein is a prime, recent example of this. He allegedly, over many years, sexually assaulted women. He settled with many of them out of court, paid them money, and then covered his tracks with NDAs. Because Weinstein’s victims were legally silenced, on pain of lawsuits and large financial penalties, no one talked. These NDAs were drawn up and enforced by one of the world’s most prestigious law firms.

harvey weinstein

Harvey Weinstein. Photo: Flickr via Thomas Hawk.

Another recent example is the President’s Club auction dinner in London. This was a long-running affair where wealthy men converged for a night of fun and charitable giving. However, this year a journalist got herself hired as a “hostess” and found that the night was also full of sexual assault and harassment against the hostesses. This was apparently a regular occurrence, but was not known for decades because, in part, the hostesses were required to sign NDAs before being hired for the night. They were legally restricted from talking about anything that occurred that night.

Organized crime prospers in part because witnesses are afraid to report illegal activity to the police or to testify in court. In the case of organized crime, the fear is often due to the threat of violence to themselves to their families. There is no substantive difference between wealthy people using the threat of lawsuits to repeatedly sexually harass and assault women, and triads or mafia using threats of violence to perpetrate crimes. Lawyers should be ashamed that they enable sexual violence through helping clients draft and enforce NDAs to silence assault victims. Law societies should consider ways to restrict such shameful activity under their codes of conduct.

Beau Lefler is a former corporate lawyer who currently teaches legal and business related courses at the University of Hong Kong.

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Int'l Women’s Day 2018: Non-disclosure agreements silence victims and enable sexual predators