There is an interesting legal question at the heart of the still unfolding scandal over whether Republican Presidential contender Herman Cain engaged in sexual harassment. Women accusing Cain were reportedly given a settlement with a gag provision — a common element to such settlements.

Herman Cain has spoken about the allegations, including quoting from his account and suggesting that he merely mentioned that a woman was the same height as his wife. He then suggested that they were hiding behind anonymity — even though their agreement gagged them.

A typical such provisions states: “The terms and conditions of this Agreement are absolutely confidential between the parties and shall not be disclosed to anyone else, except as shall be necessary to effectuate its terms. Any disclosure in violation of this section shall be deemed a material breach of this Agreement.”

Now, their attorney Joel Bennett has said that the Cain interviews with Fox New may have violated the same provision — and thus invalidated the gag on the women. The whole idea of these provisions to prevent either party from “taking a victory lap” or denouncing the other party. They are only enforceable to the extent that your client honors the gag. When confronted with a public allegation, you have to counsel your client on the costs of going public — the chance that the other party will then be free to add details and respond in kind. Such agreements often have not just a confidentiality agreement but a non-disparagement provision.

He certainly appears to have tripped the wire with statements like:

–“I’ve never sexually harassed anyone and I was falsely accused while I was at the National Restaurant Association.”

–“She was in my office one day, and I made a gesture saying – and I was standing close to her – and I made a gesture saying you are the same height as my wife. And I brought my hand up to my chin saying: “My wife comes up to my chin.”

–describing the women as bringing “false accusations.”

Of course, this comes down to the language of the provision. In cases like Hopgood v. Merrill Lynch, 839 F. Supp. 98 (P.R. 1993), the court rejected such a claim because the provision only refers to the “terms” of the settlement and not discussing other aspects.

When a case is settled in litigation, these confidentiality agreement are often incorporated in courts orders, allowing for the court to hold parties or lawyers in contempt for any breach. Baella-Silva v. Hulsey, 454 F.3d 5 (1st Cir. 2006). Thus the typical remedy is found in a breach of contract action as opposed to self-help through counter statements. In agreement like the one in Baella, the provision contains the remedy. In that case, the agreement stated “[c]onfidentiality is the substantial consideration for th[e] compromise” and provides that “[a]ny violation of confidentiality . . . will result in liquidated damages of Fifty Thousand Dollars ($ 50,000.00) to be assessed by this Honorable Court after notice and hearing.”

Absent such a provision or incorporating court order, an aggrieved party will often feel free to public defend themselves in the knowledge that the other party can no longer prevail in a breach claim given their own violations. Even then however it is often important to keep the defense within the scope of the original violation. If you opportunistically go beyond the original violation, you could still find yourself subject to an action for breach.

This issue comes up often with attorneys who are criticized by clients and are able to defend themselves outside the normal limitations of confidentiality for attorney-client relations.

Likewise, employment agreements often include non-disparagement clauses like the one below:

Executive agrees that, during the term of employment and for one year thereafter, executive shall not, in any communications with the press or other media or any customer, client or supplier of company, or any of company affiliates, criticize, ridicule or make any statement which disparages or is derogatory of company or its affiliates or any of their respective directors or senior officers. No directory senior officer of company will, during the same time period, criticize, ridicule or make any statement which disparages or is derogatory of executive.

Here Cain has clearly attacked the veracity of the women and made very concrete (and what the attorney says are misleading) descriptions of the allegations. Of course, there remains the question of who leaked the settlement. That can be a fact that would be the basis for discovery if either party were to sue under the contract.

For their part, the women (or Cain) could also threaten a defamation action. Cain’s statements are not made in filing or in court and are thus not privileged. Conversely, the statements of the lawyer or his clients have been made publicly. It is possible that any party could claim that this ultimately comes down to a difference in opinion as to what constitutes sexual harassment. However, Cain is saying that the statements are are false and made behind the veil of anonymity — suggesting some other than a difference in perspective.

There is also the question of whether Cain should, as a candidate for the highest office, formally waive any confidentiality and allow the women to speak without threat of legal action. After all, he has basically called them either liars or opportunists or both. He has the ability to ungag the women and they can in turn agree that he is not bound by confidentiality in responding.

Source: The Hill

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