Non-Disparagement Provision in Law Against Discrimination Settlement Agreement Violates Public Policy

Savage v. Township of Neptune, ___ N.J. ___ (2024). N.J.S.A. 10:5-12.8(a) (“section 12.8”) is a provision of the New Jersey Law Against Discrimination (“LAD”). Enacted in 2019 during the “#MeToo” movement, that section states that a settlement agreement provision that “has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment (hereinafter referred to as a ‘non-disclosure provision’) shall be deemed against public policy and unenforceable. against a current or former employee (hereinafter referred to as an ’employee’) who is a party to the contract or settlement” That language was at the heart of this unanimous opinion by Chief Justice Rabner, which held that a “non-disparagement” contained in a settlement agreement in an LAD case was void as against public policy.

Plaintiff had been a police officer with the Neptune Township Police Department. She filed two complaints, in 2013 and 2016, for sexual harassment and related wrongdoing in violation of the LAD. The first case settled, but the second case came about because plaintiff alleged that defendant had violated the settlement agreement from the first case. In 2020, the second case also settled.

In resolving that second case, the parties entered into a settlement agreement that contained this language: “The parties agree not to make any statements written or verbal, or cause or encourage others to make any statements, written or verbal regarding the past behavior of the parties, which statements would tend to disparage or impugn the reputation of any party. The parties agree that this non disparagement provision extends to statements, written or verbal, including but not limited to, the news media, radio, television, . . . government offices or police departments or members of the public.”

Later in 2020, plaintiff was interviewed on television about the case. Both she and the reporter who interviewed her made statements that defendant found objectionable. For example, plaintiff said (referring to defendant) “You abused me, you abused me for about eight years,” and stated that women would not get equal access to promotions in the police department “because we’re oppressed. They don’t want women there. It has not changed, not for a minute. It’s not gonna change, it’s the good ol’ boy system.”

The statements in the interview led defendant to file a motion to enforce the non-disparagement provision of the second settlement agreement. The Law Division found that the provision was enforceable and that plaintiff had violated it, barred plaintiff from making other statements that disparaged defendant, and awarded defendant counsel fees and costs (though not damages, which defendant had also sought). Plaintiff appealed, and the Appellate Division affirmed in part and reversed in part in an opinion reported at 472 N.J. Super. 291 (App. Div. 2022) and discussed here. That court agreed that the provision was enforceable but held that plaintiff had not violated it.

Exercising de novo review, the Supreme Court reversed the rulings below that the non-disparagement provision was enforceable. Chief Justice Rabner observed that the LAD is to be construed broadly in order to “protect the public’s strong interest in a discrimination-free workplace.” Though, as quoted above, the LAD used a shorthand term– “non-disclosure agreement”– Chief Justice Rabner said that that shorthand did not exclude non-disparagement clauses to the extent that such provisions have the effect of concealing details related to a claim of discrimination, retaliation or harassment.

The opinion went on to describe how the language of the LAD and the legislative history of that language reinforced the Court’s view. The settlement agreement here violated the statute, as all the statements about which defendant complained were about “claims of discrimination, retaliation, and sexual harassment she had already filed. In addition, defendants, in effect, sought to enjoin [plaintiff] from making further statements about those claims.” Accordingly, the non-disparagement clause was void as against public policy and was unenforceable.