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Avoid Violating Confidentiality Agreements and Non-Disclosure Agreements by Knowing What Rights You’re Giving Up

top.lawyers.arrive.mag.2011.jpgRepublican front runner Herman Cain is on the hot seat this week for allegations that he engaged in sexual harassment with one to possibly three female employees who worked for him while he was head of the National Restaurant Association. Cain has stated that in his “40 years of business experience,” he has “never sexually harassed anyone.” Cain has also responded that he has been falsely accused. One of the women signed a non-disclosure agreement (“NDA”)where she agreed to keep all the facts and details regarding the settlement confidential.

Confidentiality Agreements or NDAs are often used during settlements as well as mediation to resolve disputes between employees and employers. Both parties basically agree not to speak or disclose to any person any of the terms used in making the agreement or the facts or circumstances related to any asserted or potential claims against the employer. In exchange for the employee not bringing a lawsuit against the employer and not speaking about the charges, the employer usually agrees to a monetary payment. For example, if an employee had alleged that he was discriminated against because of his race, he would be agreeing to never file a lawsuit based on those allegations. Our attorneys have reviewed and drafted many such agreements to ensure that our clients’ rights are protected and that they received the highest possible settlement.

Most agreements will also prohibit both the employee and the employer from speaking about the charges and in the event that either party breaches the confidentiality clause, a well drafted agreement will contain a liquidated damages clause imposing penalties for violating the agreement. In other words, if the employee tells a friend, a co-worker, or the media about the circumstances pertaining to the confidentiality agreement, the employee would in breach of the contract and have to pay the amount called for in the contract.

The agreement will also contain a non-disparagement or non-interference clause which provides that both parties will not make any written or oral statements or remarks which are disparaging or damaging to the integrity, reputation or good will of the other. For example, if an employee had alleged that her supervisor had sexually harassed her, this clause would prohibit the employee from making any negative comments about the supervisor. The employee cannot sign this document and than tell her friends that her supervisor is a pervert who wouldn’t promote her because she didn’t sleep with him. Once you sign this, you cannot bad mouth or make any negative comments about your employer.

Cain first denied knowledge of the settlement, then admitted that there was an agreement which included payment, and also talked about one of the woman’s work performance as being “not up to par.” He has commented that these women made up the charges and that they were baseless. By speaking about the sexual harassment and the settlement payment, Cain may have violated the terms of the non-disclosure agreement. On the other hand, one of the women who claimed that Cain had sexually harassed her has not said anything. In fact, her attorney has stated that the NDA she signed is stopping her from speaking and has asked the Restaurant Association to waive the agreement so that she can tell her side of the story.

It is crucial to have an attorney represent you if you have suffered from any type of employment discrimination or sexual harassment and your employer is trying to settle the charges with you. Before you sign a settlement or a confidentiality agreement, you need to know what rights you are giving up. For example, it might be important for you tell a prospective employer why you left your old job, which an NDA might prevent you from doing. Before you limit your rights, call our attorneys at Villanueva & Sanchala at (800) 893-9645 to help you protect your rights.


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