Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

NDAs and Confidential Settlements Shake State Capitols and City Halls

People who work for the Trump administration and Congress members aren't the only government employees being asked to sign legally questionable contracts to keep secrets.

The Massachusetts state Capitol
(David Kidd)
It was recently revealed that many of Donald Trump’s top advisers were asked to sign nondisclosure agreements (NDAs), forcing them to keep quiet about what happens in the White House -- even after his presidency ends. Ruth Marcus, deputy editorial editor of The Washington Post labeled these agreements a presidential first and “not just oppressive, but constitutionally repugnant.” Government ethics experts say they are legally questionable. 

Meanwhile, confidential settlements -- which are often used to close the books (and keep them shut) on allegations of sexual harassment and discrimination -- have caused controversy on Capitol Hill, where the #MeToo movement led to the revelation that Congress spent $17 million of taxpayer money to settle these kinds of cases in the last two decades.

These types of secret-keeping contracts, though, are being used in state and local government, too.

Later this month, for instance, a legislative panel in Montana will start looking into a reported escalation of confidential settlements between state employees and the executive branch. According to a December memo from the legislative auditor’s office, these settlements hovered below $200,000 prior to 2009 but climbed to more than $800,000 by 2017. The memo -- which the executive branch questions -- doesn’t identify the specific problems involved in the settlements.

This behind-closed-doors approach to resolving conflict in government troubles many. 

“If public money is spent, it should be public information,” says Montana state Sen. Fred Thomas, one of the legislators who asked the auditor to look into confidential settlements.

Secret agreements have also generated controversy in Massachusetts state government. There, The Boston Globe has made a public records request for copies of 33 confidential settlements signed by House Speaker Robert DeLeo since 2010. So far, it has refused the Globe’s request. But in March, the House did pass a measure to release former chamber employees from any NDAs they had signed.

In 2016, the issue shook the Alabama governor’s mansion, where Robert Bentley -- who resigned in 2017 after news of his alleged affair with a campaign aide -- had 87 members of his staff sign nondisclosure agreements two years prior. The governor’s office said the NDAs were unrelated to allegations of the extramarital affair, though news reports raised suspicion about the timing.

And in Philadelphia, reports of sexual harassment -- and a subsequent settlement for one employee --led to calls for Sheriff Jewell Williams to resign and for the city to reconsider how NDAs and settlements are applied in cases of sexual harassment.  

“Settlement agreements tend to protect the harasser and intimidate the victim, and contribute to sustaining serial cases,” wrote the city’s Commission for Women in a press release.  “We believe that the victim should be the one to decide whether or not settlements remain confidential.”

Legislation to curtail agreements or settlements that require confidentiality have since been introduced in Pennsylvania as well as California, New Jersey, New York and Washington state. Most of the bills specifically relate to sexual harassment or discrimination and would apply to both the public and private sector. 

The California legislation will be considered by the Senate Judiciary Committee this month.  Its author, state Sen. Connie Leyva, says that it would ban the perpetrators of harassment from entering into confidential settlements while preserving victims’ right to keep their information private. 

Confidential settlements are often prompted by the desire “to make victims sign off and go away and not say anything about what happened,” says Leyva.  “This is our moment in time to try to fix this.”

Some states and cities already limit secret agreements.

San Francisco, for instance, prohibits the city from entering into confidential settlements. And in Iowa, a 2014 executive order, signed by then-Gov. Terry Branstad, bans agencies from adding confidentiality requirements to employee settlements and requires personnel settlements to be reviewed by the attorney general’s office. Branstad’s order followed news that six employees, who had filed grievances about their dismissals, had been paid more than a quarter of a million dollars in confidential settlements.

Legal scholars express doubt about whether confidential settlements and broad nondisclosure agreements in the public sector are enforceable. 

“Legally, it’s very problematic to do these in the public sector. It runs afoul of public-sector employment law or sunshine laws,” says Alexander Colvin, a professor of conflict resolution at Cornell University and an expert in labor law.

The issue is particularly problematic for potential whistleblowers. 

At the federal level, a whistleblower’s ability to report wrongdoing is strongly protected, but state laws tend to be weaker, vary dramatically and may not be known to employees, says Tom Devine, legal director of the Government Accountability Project, an organization dedicated to protecting whistleblowers. 

He worries that any kind of agreement that curtails public employees’ free speech could deter them from flagging problems.

“There are administrative and legal remedies that would allow employees to break nondisclosure agreements or speak out or blow the whistle despite a confidential settlement,” he says. “But the mere existence of the agreement is highly chilling.” 

This appears in the Management & Workforce newsletter. Subscribe for free.

Caroline Cournoyer is GOVERNING's senior web editor.
Special Projects