You're listening to Bloomberg Law. I'm Greg's store with June Grasso. In Harvey Weinstein agreed to pay actress Rose McGowan a hundred thousand dollars. The accord settled her claims over a hotel room incident she has since described as rape. It also bought McGowan silence, silence that helped Weinstein stay in his purchase one of Hollywood's most powerful movie producers for the next two decades. With more than forty women now accusing Weinstein of sexual harassment or assault, that type of
nondisclosure agreement is getting renewed scrutiny. Some people are asking whether they do more harm than good when it comes to sexual improprieties, perhaps even covering up criminal activity. With us to talk about the subject is Rebecca Greenfield. She's a Bloomberg News reporter and the host of the Bloomberg game Plan podcast. Rebecca, thanks for joining us um in
your UM. In your recent story on the subject, you talk about how nondisclosure agreements come in several different flavors, but with regard to um sexual harassments, settlements give us a sense of what they typically include, So thanks so
much for having me. Yeah, So what often happens is that you will have alleged harassment and you might want to sue, but instead you will settle, and a part of the deal of the settlement is that you sign a non disclosure agreement saying that you won't talk about any of the facts that happened. And this is this is common. I mean, this is not just harv Weinstein that's using these. These are very common in sexual harassment cases.
It's hard to know how common because we can't talk about it, but usually that is what the agreement looks like. They're also common in a lot of civil litigation. And part of the reason for making many of these settlements out of court is keeping the case out of the courtroom and out of the public. So the question is would there be these kinds of settlements if not for
these non disclosure agreements. Yeah, I mean, I think some people want to settle, they want some sort of money for their their problems, and might not want to talk about it. I think people who do want to talk about it, Yeah, they're not going to have they're not going to go into this non disclosure agreement. But yeah, without the settlement, you're not going to get the agreements one kind of goes with the other. So if somebody signs a nondisclosure agreement in this context, what does it
prevent them from doing? Specifically? For example, would somebody be able to talk to prosecutors who are looking into criminal allegations or talk to the UH Equal Employment Opportunity Commission UH looking into a not perhaps that particular case, but but a broader practice involving a person or a company. Yeah, with regards to sexual harassment allegations, the NDA can't prevent you from talking to law enforcement or from filing with the e o C. I think that these agreements still
have a way of killing people from doing that. And in my reporting, a lot of people don't know that that is something that you can't do, but it's it's really shouldn't prevent you from working with law enforcement. Um. There was an NDA that I did see that tried to make it so that if you talk to you can you could talk to law enforcement or the e o C, but you couldn't talk to a third party about those things. UM. So you could see how that would also have a chilling effect on what you can
and can't talk about. Rebecca, I don't recall any court cases where someone violated confidentiality clause and the other side brought them to court. Have have you heard of any? So I talked to a lot of lawyers about this. It does happen, but I think what it's more the threat of the lawsuit that stops people from doing that. I mean, if you're a single person going up against a company, a company has so any more resources and they're gonna say you broke this contract and threaten you
with the lawsuits. So I think that is probably what happens more often it's the threat of the lawsuit. Um. But I did have one experts showed me that that a a court had found that someone had violated a confidentiality agreement. But even in that settlement, it was unclear how much money the person out in the end. So
it's kind of like the end of the lawsuit. You know, it's not as um, you might not have to pay as many damages as you think you might have to a lot of people think that you have to pay back your whole settlement. Really, a court, I was told, would wouldn't really find that to be a realistic penalty for breaking one of these But of course, you're gonna end up paying so much more in time, money, reputation if you have to go to court for a lawsuit over breaking something. So you have to wagh if it's
really even worth it. Rebecca, what are we seeing in terms of efforts to bar NDAs at least NDAs that prevent victim of sexual harassment and assault from from speaking out. Yeah. So, right after these Weinstein revelations came forward, um to New York state lawmakers introduced legislation to avoid any contract that includes a provision to silence workers about harassment or discrimination. It's still really early on in the process. He said
that the legislator doesn't even meet until January. But I think that they're hoping to ride this wave of publicity and anger over what nondisclosure agreements can do. Weinstein had two kind of kinds of n d as he had, accorded to The New York Times. He had the ones that we're talking about in settlements, and then he also had one that his employees, uh were sawn were required to sign it. Tell us about that the last the
employee one. So yeah, nd as, as, as mentioned come in so many different flavors and even we've seen with the Trump administration, he has everybody signed n d as, So it's not an uncommon practice. I'm sure anybody who's worked at a company knows you usually sign an n d A. Often it's supposed to protect trade secrets, which the courts are pretty strong on. They don't they will
you know, you shouldn't sell your company's trade secrets. Um, But I think again they are used in this way that also scares people into thinking they can't talk about anything, and that is not going to be found to be enforceable, I'm told, but it doesn't really matter because it has this power and effect. Just you signing a document, you think you're you can't break. You sign something, you can't break it. So so I think that's that's the kind
of employee n d A that we see. But I just want to circle back to something that that June asked about earlier. But, Um, isn't there wouldn't isn't there concerned that if nondisclosure agreements are barred that it will make it harder for a victim of sexual harassment or sexual assault to get a settlement. I mean, she feels like she's a victim. She uh, you know, wants compensation for it, and she has to work read that, Um it will become public. Will that not make her less
likely to settle that case? You know, I'm not sure the answer to that because we just don't know yet. But I understand the argument, Um, why would an employer give you money if they're not getting anything in return? So so yeah, that's a question that definitely people who are advocating for for fewer n d as I think you need to grapple with just in about thirty seconds. Is this case bringing up things that people and when you're talking to people that people didn't realize before about
these indias, they may think twice before they sign them. Now. I think that the lawyers I talked to have been dealing with this for a really long time. I think people reading the story now realize that not everything you sign is necessarily as enforceable as you think it is. But I mean, I don't see it changing really anytime soon. But but I mean these out that there are a lot of allegations and a lot of conversations, So so
maybe the NDA will get another look. I want to thank Rebecca Greenfield, Bloomberg News reporter and host of the Bloomberg game Plan podcast for talking to us about nondisclosure agreements in the context of sexual harassment settlements and in particular, Harvey Weinstein. That's it for this edition of Bloomberg Law. We'll be back tomorrow thanks to our technical director, Director
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