It is true that financial settlements, which are routinely conditioned on a hush contract, have real value for individual victims of sexual harassment. They pay the rent when an employee’s best option is to quit an abusive workplace, they pay for the lawyers, and they protect the victim herself from unwanted publicity. But they do these things at a cost that is not obvious from the terms of the deal. From the perspective of moral psychology, the document itself casts aspersions on its signers: In settling, both emerge compromised.
In this context, a recent NBC statement purporting to offer a release deserves attention:
Any former NBC News employee who believes that they cannot disclose their experience with sexual harassment as a result of a confidentiality or non-disparagement provision in their separation agreement should contact NBCUniversal and we will release them from that perceived obligation.
This appears to be a carefully lawyered sentence full of puzzling phrases. Why do individuals need to contact NBC before they are released? Couldn’t NBC issue a broad indulgence? Why only former NBC News employees (are there independent contractors who should still consider themselves bound)? But let’s focus just on the words believe and perceive.
The statement cites employees’ beliefs and perceptions, but not what the agreements actually say. The words appear to preserve some formal deniability about the intended scope of the NDAs. But contractual obligations usually are or are not. When we teach contract law to first-year law students, we remind them relentlessly that what matters is the objective evidence of obligation, not the idiosyncratic subjective mental state of one party.
In fact, the statement is more correct than its authors know. The perceived obligation is the whole point. The deals are almost certainly unenforceable anyway. Does that eliminate their consequences for victims of sexual harassment? No; they exist in part to terrorize. Hush contracts are insidious because they can work whether the courts will enforce them or not.
In California and a handful of other states, hush contracts are now explicitly banned in sexual-harassment cases. That often means that such deals wouldn’t be enforced in court, whether firms like NBC release their counterparties or not. Courts won’t, for example, force a silenced victim who now wishes to speak to return the money she received. National bans are pending before Congress.
But even if no court in the land would enforce these deals, it does not mean that terms in existing contracts will vanish, nor that companies will not attempt to preserve their reputations by buying silence in the future. (In California, workers are sometimes asked to sign non-compete agreements even though those, too, are not legally enforceable.) For firms, whether a court will ultimately uphold a hush contract is in some ways sort of beside the point. Threat of legal action, with its intimation of moral opprobrium, is enough to deter many complaints. The damage is done the moment a hush agreement is signed.