
U.S. states reconsider confidential deals in workplace harassment - KirinDave
https://www.nytimes.com/aponline/2018/08/26/us/ap-us-sexual-misconduct-confidential-agreements.html
======
robaato
Slightly off-topic, but this article shows what has been tried in some NDAs:

[https://www.theguardian.com/film/2018/aug/26/former-
weinstei...](https://www.theguardian.com/film/2018/aug/26/former-weinstein-
assistant-urges-ban-contracts-silence-harassment-victims)

The clauses attached to the Weinstein agreement signed by Perkins offer an
insight into how egregious some NDAs can be. She was prohibited from even
obtaining a copy of the agreement – she could only look at it supervised at a
law firm’s office, a clause that also prevented MPs from acquiring the
document. Ultimately she obtained the agreement in June through a personal
data request. Its contents confirmed that she was banned from talking to a
doctor, therapist or psychoanalyst about Weinstein’s alleged harassment unless
they also signed an NDA and that she should not speak about the payment even
if HMRC questioned her about it.

“If a therapist, for instance, broke the agreement, I would be held
responsible for their disclosure. There were guns pointed from every angle,”
said Perkins, who has since managed to rebuild her career as a successful
associate producer.

~~~
raverbashing
I really would like to see how banning health care professionals from knowing
about a case would fly on the courts (though being in the US you never know).
Also how do you prove it? They're under patient confidentiality laws.

Still makes me think Weinstein deserves what has come to him.

~~~
AnthonyMouse
> I really would like to see how banning health care professionals from
> knowing about a case would fly on the courts (though being in the US you
> never know). Also how do you prove it? They're under patient confidentiality
> laws.

There is actually a reason for a clause like that. There is doctor-patient
confidentiality, but the patent is allowed to waive it, and has the incentive
to do so if they didn't actually want to be bound by the NDA and can use that
as an exception. Or if the doctor blabs in violation of doctor-patient
confidentiality, the patient would have a claim against the doctor (but no
incentive to pursue it) while the party the NDA is protecting wouldn't have a
claim against the doctor _or_ the patient. So the NDA has that clause to give
them one.

There isn't really any way to know if they tell a doctor without an NDA and
then the doctor never tells anyone else, but then nobody cares either. The
only time it matters is if the doctor does tell other people, and then that's
how they know.

~~~
raverbashing
Ah yes, it's a legal justification, but as the article said, criminal
investigations should not be blocked by civil agreements.

Ethical-wise I can think of only a couple of acts (usually headline worthy)
that look less ethical than that.

~~~
AnthonyMouse
> Ah yes, it's a legal justification, but as the article said, criminal
> investigations should not be blocked by civil agreements.

The solution to which is, of course, don't sign them.

The settlements are a compromise. The defendant would rather pay money than
admit to wrongdoing and the plaintiff would rather be paid a lot of money than
have to relive the incident in court, so they come to an agreement.

If you take that away, you're leaving the option that neither party preferred
over what actually happened -- otherwise either of them could have chosen it
to begin with.

If the victims don't like that trade off then they can stop agreeing to it.
But if they continue to decide it's the right choice for them then who the
heck are we to tell them they're wrong?

------
TheAceOfHearts
A bit tangential, but I think services which include an arbitration clause
should be forced to display it up front in plain language during registration
and get clear confirmation from the user, and it should be strictly opt-in.

Ever since GDPR became a thing I started reading the Terms of Service of every
major site I use.

Yesterday I found out my Starbucks account has a forced arbitration clause
which you can only opt out of by sending a physical letter to their
headquarters, and only if you do so within 30 days of having signed up. This
is customer abuse at its finest, and should definitely not be legal. If I can
sign up online I should be able to opt-out online, at least.

Even worse is their linking policy, which I cannot imagine is actually legally
enforceable. How can linking to a publicly accessible page have terms
associated with it? And the terms are incredibly user-hostile, since it
basically says you can't link to them if you're saying anything bad or
negative about the company.

I'd normally include a link, but I guess you'll have to search for it yourself
if you want to confirm what I'm saying. Just look up "Starbucks Terms of
Service", it'll be the first result ;).

~~~
pluma
A lot of contracts (especially ToS) are just throwing stuff at a wall to see
what sticks. I've yet to see a ToS or EULA that's 100% enforceable in the EU
and I'd be surprised to hear they're 100% enforceable even in the consumer-
hostile, corporation-friendly US.

An overeager ToS is a good way to scare people who are unwilling to risk a
legal dispute. In practice a lot of the more preposterous clauses are
nonsense.

~~~
rectang
It doesn't matter if the nonsense provisions are ultimately enforceable, so
long as they're credible enough to be litigated. The courts provide a
battlefield where the army of company lawyers will fight you in a lopsided war
of attrition that ends with your financial ruin. Might makes right.

~~~
evandijk70
Seems like there should be a fine for putting unenforcable clauses into
contracts to discourage this practice

~~~
rectang
I agree, but I think your perspective on this depends on who you think the
courts are supposed to serve.

In the US, courts enabling wealthy corporations to smash individual citizens
into meat paste are working as intended. It is "justice for sale", albeit
indirectly -- you don't pay the judge, you pay for enough lawyering to destroy
the opponent, win or lose.

------
Pinckney
This is likely to be struck down, as it conflicts with the FAA

[https://www.shrm.org/resourcesandtools/legal-and-
compliance/...](https://www.shrm.org/resourcesandtools/legal-and-
compliance/state-and-local-updates/pages/california-arbitration-bill-sexual-
harassment.aspx)

~~~
rayiner
Maybe. To the extent a case involves a purely intra-state contract (e.g. your
typical employment contract), it might be viable. I’d argue it’s
unconstitutional to apply the FAA to a preempt state contract law that has
purely intra-state effect.

~~~
DannyBee
If they force california companies to do this to out of state employees, for
sure they'd lose that argunment.

The interesting provision of the FAA is this one: " but nothing herein
contained shall apply to contracts of employment of seamen, railroad
employees, or any other class of workers engaged in foreign or interstate
commerce."

~~~
KirinDave
The way this works is the same for nocompetes. They still put the language in
your employment contract, but stipulate that the unenforceable bits (which
they don't name) don't invalidate the entire contract. That way, out-of-state
contractors can still have less rights; don't worry!

Of course, we might see Californian companies simply give up the practice.
Your post did conjure in my mind the delightful image of an angry out-of-state
contractor shouting into the phone, "Why do I have so many rights?! Why aren't
I railroaded by arbitration? Why can't I be locked into a one-sided non-
disparage agreement because some executive slid his hand into my pants? I'm
furious at all my options here! While I'm at it, I _demand_ you enforce a no-
compete clause."

~~~
emodendroket
It's standard practice to include language about how some portions of a
contract bring invalid doesn't invalidate the rest of the document just about
everywhere, I think.

~~~
fmajid
It's called severability.

~~~
emodendroket
Right, that's what I was thinking of. Thanks.

------
mindgam3
Can someone modify the title to simply "California bans forced arbitration"?
"No-disparge" is a typo, but more importantly I don't see any mention of non-
disparagement clauses in the bill itself. IANAL but it appears to be 100%
related to banning forced arbitration.

[Edit] Also, the news articles referenced in a comment below make no mention
of non-disparagement clauses, only forced arbitration.

~~~
jobigoud
There is some mention of non-disparagement on the "bill analysis" tab. At
least in the Office of Senate Floor Analyses, haven't looked at the others.

------
NonEUCitizen
Does it invalidate such provisions in your already-signed existing employment
agreement with your current employer?

~~~
bdonlan
> 432.6. (a) A person shall not, as a condition of employment, continued
> employment, the receipt of any employment-related benefit, or as a condition
> of entering into a contractual agreement, require any applicant for
> employment or any employee to waive any right, forum, or procedure for a
> violation of any provision of the California Fair Employment and Housing Act
> (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the
> Government Code) or this code, including the right to file and pursue a
> civil action or a complaint with, or otherwise notify, any state agency,
> other public prosecutor, law enforcement agency, or any court or other
> governmental entity of any alleged violation.

> [...]

> (f) This section applies to contracts for employment entered into, modified,
> or extended on or after January 1, 2019.

So, note that arbitration could still be mandated for violations of your
employment contract, but not for litigation concerning employer violations of
the California Fair Housing and Employment Act. If your employment contract
has a defined end date, then renewal of that contract after 2019 will be under
the provisions of this new law. For ones that don't have a defined end date,
I'm not clear on whether they could be considered continually extended, or if
it would just be a grandfathered-in contract.

------
SamReidHughes
I don't see it banning non-disparagement clauses. Only aspects pertaining to
sexual harassment.

~~~
KirinDave
Sorry, I didn't have room in the title. I think you're right: non-disparage
agreements are null in the face of sexual harassment lawsuits but in other
cases don't seem to be affected. Forced arbitration seems to be unenforceable
in all cases.

~~~
yuhong
That being said, I have been thinking about Yishan-style CEOs for a while now.

------
siruncledrew
More context on the bill:

1\.
[https://www.sacbee.com/opinion/editorials/article211839964.h...](https://www.sacbee.com/opinion/editorials/article211839964.html)

2\.
[http://www.dailyfreeman.com/article/DF/20180826/NEWS/1808297...](http://www.dailyfreeman.com/article/DF/20180826/NEWS/180829787)

------
jkaplowitz
This seems like the Federal Arbitration Act might at least partly pre-empt it.
But I wonder why no legislature has taken advantage of the limited scope of
the FAA? Specifically, it only pertains to the enforceability of contracts,
but not other disincentives.

For example, a state could raise its corporate income tax rates, but as a
separately severable provision, give a tax credit reversing X% of the tax hike
if X% of their employees have no restrictions on their ability to publicly
litigate and disclose harassment and discrimination claims. (Many variations
on the specifics are possible.)

If companies drop these restrictions, it's no extra tax for them and just a
few extra lines to complete on a tax form.

Alternatively, if companies keep these restrictions, there's no conflict with
the FAA, just a financial penalty.

And if they get the tax credit provision struck down somehow, they keep the
tax hike regardless of their employment legalese, so they may not want to
fight that battle.

What major flaw am I missing? Just the optics/PR around this politically
speaking, or something worse?

~~~
Retric
It’s arguable that that is a fine on allowed behavior.

Consider somone charging 10,000$ per month rent, but giving white people a
9,000$ discount would clearly be illegal.

~~~
toxik
I don’t understand how this connects to racism.

~~~
Retric
Swap block for disabled if it helps. The point is if it’s illegal to charge
more for some group, it’s also illegal to give people discounts because they
are not in that group.

Aka, Charging X more is equivalent to giving everyone !X a discount while
excluding X from the standard discount.

~~~
toxik
You can give benefits to the disabled. You cannot simply switch disabled with
whites and say that because a transmutation of the practice is racist, so is
the practice. The original proposal was for corporations, who are not capable
of being discriminated against.

~~~
Retric
Expect, Non-disabled is not a protected class so you can directly give the
disabled discounts much like how you can give seniors discounts.

And again, discrimination is not the point, the point was discounts is not a
way to get around charging X more. If a state can’t charge a fine for doing X
the also can’t give a discount for not doing X.

------
partycoder
The point of arbitration is to settle a problem with the help of a trusted,
neutral 3rd party. Forced arbitration does not seem as neutral.

~~~
secabeen
Arbitration should just be banned in contracts of adhesion, where one party
dictates the terms and the other party cannot edit or change them. Sure, if
you're writing a real contract, where both sides are negotiating terms,
arbitration can be something the weaker party can agree to in return for some
other concession. It doesn't make sense in one-sided contracts.

~~~
dd36
Agree.

------
telltruth
This is good start towards striping power of employers to become judge and the
jury by exercising their "at will" clause. I would still like to see:

1\. Prohibiting employers to punish employees for exercising their free speech
outside of the work (right of free speech).

2\. Prohibiting employers to punish employees for alleged wrongdoings outside
of the work (right of due process).

------
User23
My employer sent me a form asking me to sign on to an arbitration agreement
for my already existing salaried job a year or so back. I considered saying
sure, so long as you're willing to offer me an employment contract, but
eventually I decided to ignore it. Looks like that's moot now.

~~~
DannyBee
This is the problem with passing laws that directly conflict with federal law
- it makes people think, like you do, that these issues are moot, when that's
wrong.

~~~
DoreenMichele
It also frequently gets resolved by a case making it to the Supreme Court.

State laws are not supposed to conflict with federal law.

~~~
User23
Except for the evident marijuana exception.

~~~
DoreenMichele
Yes, a large scale movement can challenge federal law. It starts by passing
laws at the state level.

In a case like that, they are sort of hoping it goes to the Supreme Court and
the court finds in their favor.

One of the issues marijuana growers and sellers are having is that they have
trouble establishing bank accounts because banks don't want to be in violation
of federal regulation.

The people passing pro mj laws and starting legitimate mj businesses could be
viewed as a quiet, non violent civil rights movement. Everyone doing stuff in
that space is sticking their neck out.

I'm allergic to mj, so I'm not willing to stick my neck out, but I am for the
legalization of mj. I have done some research on the topic and I have
tremendous respect for the people quietly working to make this legal in the
US.

------
dragonwriter
“In employment”: forced arbitration and non-disparagement clauses are in
contracts in other domains as well.

Also, not yet law; the status on the bill is enrolled, which means it has past
both houses of the legislature but not been signed by the governor.
Presumably, Brown will sign and not veto this, but that's just a reasonable
assumption about the future, not the state of the law.

------
emodendroket
I am impressed. Great move.

------
grosjona
I was reading about non-disparage clauses and I find it disturbing that these
clauses are allowed to override a law as fundamental as free speech. It's
disturbing that the US needs to make new laws just to reaffirm the validity of
some of its oldest, most fundamental laws.

Doesn't that in itself reduce the credibility of all laws? Maybe the real
problem is that the justice system is not doing its job properly.

~~~
throwaway2048
free speech in terms of the 1st amendment is about _government_ restrictions
on free speech, the law is mostly totally silent on private agreements or
arrangements.

This is a fundamental distinction that is missed entirely in way too many
online conversations.

