I wrote my last column about the letter that had been written by all of the state attorneys general in the United States to leaders in Congress asking them to enact legislation to protect the victims of sexual harassment in the workplace by making binding arbitration provisions in employment agreements illegal.
Some employers have demanded that employees sign agreements that require any claim of sexual harassment or discrimination to be decided in arbitration and thereby give up their right to seek recourse in the judicial system. This letter is a significant development that is obviously in response to the #metoo movement.
There was another part to this letter that has not drawn the attention that the arbitration issue has attracted. The attorneys general also stated: “Additional concerns arise from the secrecy requirements of arbitration clauses, which disserve the public interest by keeping both the harassment complaints and any settlements confidential.”
They also stated: “This veil of secrecy may then prevent other persons similarly situated from learning of the harassment claims so that they, too, might pursue relief.” They concluded their letter by stating: “Congress today has both opportunity and cause to champion the rights of victims of sexual harassment in the workplace by enacting legislation to free them from the injustice of forced arbitration and secrecy when it comes to seeking redress for egregious misconduct condemned by all concerned Americans.”
This veil of secrecy does not just affect claims of sexual harassment. Almost every settlement agreement my clients execute includes a confidentiality provision. It is a condition of nearly every settlement of any claim of medical malpractice and every employment case. Health care providers and employers insist on confidentiality. If a physician enters into a settlement, there is a reporting required to a national data bank that only health care providers can access. Thus, the data bank does not serve a large public interest of informing the public of negligent conduct by physicians. Employers sued for harassment or discrimination can also hide behind the confidentiality of settlements.
The only way a patient can find out if there has been a case against his or her doctor is by accessing Case.Net, an internet site for every court in Missouri. You can insert the physician’s name and find out if he or she has been sued. It barely costs $100 to file a suit and sometimes suits are filed because of the short statute of limitations on medical malpractice cases. Thus, filing a lawsuit alone is only proof that someone alleges that a health care provider is negligent. An indication that some payment was made in a settlement is a “dismissal with prejudice.” Such dismissals must be filed by attorneys for all parties to the case and the judge must enter an order dismissing the case. A plaintiff can dismiss a case without prejudice in Missouri state courts without judicial approval, but may only do so once without court approval. A dismissal without prejudice may allow the party to file the suit again in the future. Rarely will a dismissal with prejudice be filed without payment being made. There are exceptions.
I normally tell my clients that there is an advantage to making certain parts of the agreement confidential, especially the amount of the settlement. This keeps family members and friends from descending upon the persons setting claims to “borrow money.” However, there is also an element of maintaining a veil of secrecy so that others are not informed of egregious conduct. If it were illegal to make settlements confidential, it could actually serve a very strong public interest in allowing the public to be well-informed about egregious or negligent conduct. Disclosing the amount of a settlement might provide some indication of the seriousness of the case, but really serves no other purpose and there is some benefit to extending privacy to the victim. Otherwise, unscrupulous people might descend upon unwary plaintiffs.
That the attorneys general of every state from both political parties have begun a dialogue about this veil of secrecy is monumental. I doubt that this request will turn into legislative action. Too many special interests want the veil of secrecy to continue. Yet, it is encouraging that leaders of both parties are talking about this issue. We can only hope that talk turns into action.
-- Bob Buckley is an attorney in Independence, www.wagblaw.com. Email him at firstname.lastname@example.org