NEW LEGISLATION IN 2019 PROTECTS THE VICTIM'S RIGHT TO SPEAK PUBLICLY IN SEXUAL HARASSMENT, SEXUAL ASSAULT AND SEXUAL DISCRIMINATION SETTLEMENTS
If you are drafting a settlement agreement in a sexual harassment, assault or discrimination case there is new legislation favoring the rights of the victim that I became acquainted with as I rewrote a boilerplate mutual release that was presented by the defendant and perpetrator of the sexual assault and harassment. Most releases have previously included blanket non-disclosure provisions which told a claimant to keep her or his mouth shut after signing the settlement agreement. For many reasons, including the victim’s need to address a traumatic incident as part of her or his recovery, the legislature now allows victims to talk about it, and prohibits efforts to silence them. As a result of this legislation, however, the parties have also lost what was used as a bargaining chip in settlement - the claimant's agreement to confidentiality.
Previously, California Code Civil Procedure §1002 prohibited the inclusion of a non-disclosure provision in a settlement agreement of a civil action for only certain sexual offenses, (an act that could be prosecuted as a felony sex offense; childhood sexual abuse; sexual exploitation of a minor; and sexual assault against an elder or dependent adult), with two exceptions allowing a non-disclosure provision relating to the privacy of medical information and personal identifying information.
In September 2018 several pieces of legislation were enacted in California that related to the rights of victims of sexual harassment. One of them was SB 820 that enacted Section 1001 of the Code of Civil Procedure, effective January 1, 2019. This statute prohibits the inclusion of a provision in a settlement agreement that prevents the disclosure of “factual information related to a claim filed in a civil or administrative action regarding: (1) An act of sexual assault that is not governed by subdivision (a) of Section 1002, (2) An act of sexual harassment, as defined in Section 51.9 of the Civil Code, (3) An act of workplace harassment or discrimination based on sex, or failure to prevent an act of workplace harassment or discrimination based on sex or an act of retaliation against a person for reporting harassment or discrimination based on sex, as described in subdivisions (h), (i), (j), and (k) of Section 12940 of the Government Code, (4) An act of harassment or discrimination based on sex, or an act of retaliation against a person for reporting harassment or discrimination based on sex, by the owner of a housing accommodation, as described in Section 12955 of the Government Code."
It is still permissible to demand that the parties agree to the confidentiality of the amount being paid in settlement in such an action, (C.C.P. section 1001 (e)), and in addition, section 1001 allows “a provision that shields the identity of the claimant and all facts that could lead to the discovery of his or her identity, including pleadings filed in court…." so long as the claimant has requested anonymity. (C.C.P. section 1001 (c).)
The information that a victim cannot be prevented from disclosing is categorized very broadly - “factual information related to a claim” - thus, the statute attempts to help the court determine if section 1001 has been violated by referring to this information in subsection (f) of 1001 as the “factual foundation of a cause of action” and instructing the court to refer to the pleadings and other papers in the record.
Counsel will now have to negotiate the language of standard non-disparagement clauses that have previously been included in a mutual release for sexual harassment and sexual discrimination cases, which seek to generally prohibit the victim from saying or doing anything that will injure or hurt the reputation of the defendant. A typically broad non-disparagement obligation will now be inconsistent with section 1001 which allows the claimant to disclose what happened, including the egregious acts of the defendant. One could anticipate that any disclosure by the victim of the perpetrator's conduct could fall within the scope of the common use of "disparage" defined by the Merriam Webster dictionary as: "Regard or represent as being of little worth", including synonyms: derogatory, deprecating, deprecatory, denigratory, belittling, slighting, insulting. A method of writing an acceptable-to-both-sides non-disparagement provision would be to narrowly tailor the non-disparagement language to conform to the actual legal definition of disparagement which refers to the elements of defamation and requires the element of falsity. Merriam Webster dictionary's legal definition of disparagement is: 1) the publication of false and injurious statements that are derogatory of another's property, business, or product. — called also business disparagement, commercial disparagement, disparagement of property, slander of goods, trade libel; 2) slander of title. Black’s Law Dictionary (7th ed. 1999) provides: "Disparagement” is “a false and injurious statement that discredits or detracts from the reputation of another’s property, product, or business.” It would appear that using language that binds the parties to refrain from intentionally publishing false and injurious statements that are derogatory, should not infringe on the rights of the victim under section 1001.