Can My Ex-Boss Badmouth Me if I Signed a Confidentiality Agreement?

Many New York employers try to conceal acts of illegal employment discrimination by convincing employees to sign severance agreements that contain confidentiality clauses. Such clauses effectively prohibit the employee from telling anyone about the discrimination he or she suffered during the course of employment. Such clauses also tend to be one-sided. That is to say, the employer and its managers remain free to make negative public statements about the employee's conduct.

Judge Enforces Severance Agreement Against Sexual Harassment Victim

A recent decision by a federal judge in upstate New York provides an important cautionary tale on the use of these kinds of agreements. The plaintiff in this case worked for a major textbook publishing company as an account executive. According to her lawsuit, she alleged a pattern of sexual harassment during her employment, specifically citing the conduct of two of her former managers.

The plaintiff said that she filed internal sexual harassment complaints with the company's human resources department. She said her manager then retaliated by threatening to fire her. Under the circumstances, the plaintiff said she was “forced to negotiate an exit” from the company. A human resources official sent the plaintiff a separation agreement for her to sign.

The agreement included both a general release of all legal claims against the company and a confidentiality clause applicable only to the plaintiff. She signed the agreement, noting at the time that she had no intention of pursuing an employment discrimination case against the company. However, she changed her mind after learning that her now-former boss was publicly disparaging her “work ethic and character” to managers at a rival textbook publisher. In effect, the plaintiff said this disparagement made her unable to find a new job as these were the only two major employers in her industry.

The plaintiff ultimately sued the employer and the two former managers for illegal sex discrimination. The defendants moved to dismiss the case, pointing to the general release and the confidentiality agreement. The judge granted the defense motion. Not only was the severance agreement binding on the plaintiff, the judge said the defendants did nothing illegal when they publicly disparaged her to other potential employers.

The severance agreement clearly stated, “You should refrain from all conduct … that disparages or damages or could disparage or damage the reputation, goodwill, or standing in the community of the Company.” The “You” here referred to the plaintiff. There was no similar language applicable to the company or its managers. Therefore, since the company never breached the severance agreement, it remained in effect and required dismissal of the plaintiff's discrimination claims.

Never Sign Anything Without Speaking to a Lawyer First

To put the lesson here as bluntly as possible: Never sign a severance agreement without talking to a New York employment attorney first. While you may be willing to sign any document to get out of a bad employment situation, your compromised emotional state will not let you back out of the deal later. This is where having experienced, independent counsel at your side can prove invaluable. If you are dealing with sexual harassment or other discriminatory conduct at work and need advice on how to proceed, contact the Law Offices of Mahir S. Nisar at 646.760.6493 today.