(908)402-4770On May 7, 2024, the New Jersey Supreme Court issued a unanimous decision in Savage v. Neptune Twp., et al. The Supreme Court held that non-disparagement clauses drafted for the purpose or effect of concealing the details of discrimination, retaliation, or harassment are illegal in New Jersey and cannot be included in settlement agreements or employment contracts.
The court ruled that such clauses violate New Jersey’s public policies, as reflected in New Jersey’s Law Against Discrimination (LAD).
Christine Savage was a former sergeant of the Neptune Police Department. In her original suit, she alleged the Neptune Police Department and several individual defendant Neptune police officers engaged in sexual discrimination, harassment, and retaliation.
Savage entered into a settlement agreement that included a non-disparagement clause in which the parties agreed “not to make any statements… regarding the past behavior of the parties, which statements would tend to disparage or impugn the reputation of any party.”
The claim arose from Savage’s interview with a television news station after the settlement was finalized. During the interview, the reporter asked Savage whether the Neptune Police Department has changed since her settlement. She replied that male officers “don’t want women there,” and that the department “has not changed, not for a minute. It’s not gonna change, it’s the good ol’ boy system.” The defendants argued in the trial court and the Appellate Division that Savage’s statements violated of Savage’s non-disparagement obligations.
The Court held the non-disparagement clause unenforceable under NJSA Section 10:5-12.8, which declares any contract or clause that has the “purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment . . . against public policy and unenforceable.” The Court explained that the non-disparagement clause in Savage’s settlement agreement barred Savage from describing the defendants’ discriminatory conduct, which is the “core of what section 12.8 protects.”
The Court reasoned that the non-disparagement clause in the at-issue settlement agreement was unenforceable as it was broad enough to encompass the “details relating to a claim of discrimination, retaliation, or harassment,” which is against public policy in New Jersey via the LAD.
However, the ruling is clear that a non-disparagement clause prohibiting disparaging statements on topics not falling into the category “discrimination, retaliation, or harassment” could still be enforceable. Thus, under Savage, non-disparagement clauses are not universally prohibited in New Jersey employment settlement agreements. For instance, statements such as “the company’s pay scale is terrible,” or “their vacation policy stinks,” which do not pertain to claims of discrimination, could be barred by a non-disparagement clause.
Non-Disparagement v. Non-Disclosure: Does It Make a Difference?
Lastly, the Savage decision dealt with a non-disparagement clause. However, its holding also applies to non-disclosure and confidentiality agreements. What is important here is the effect of the language in the settlement or employment agreement. No matter what the employer labels the clause, if the language of the clause has the effect of concealing the details of discrimination, retaliation or harassment claims, it is not enforceable.
A Related Case
In early May, the Court also struck down a civil service regulation restricting what government workers can say while pursuing harassment and discrimination claims. In Usachenok v. State of New Jersey, Usachenok made a sexual harassment complaint against her supervisor in the Department of the Treasury. State regulations permitted investigators to request all interviewees “not discuss any aspect of the investigation with others unless there is a legitimate business reason.” At a point in the investigation of the complaint, Usachenok told the state investigator she had discussed her complaint with her husband, an attorney. The investigator told Usachenok that the State could fire her for discussing the claim with her husband. That threat was later added to the complaint.
The Court held that the request for complete confidentiality about harassment and discrimination investigations is unconstitutional because it requests victims to waive their constitutionally protected right to free speech.
Experienced New Jersey Discrimination and Civil Rights Attorneys
Crafting an agreement that properly represents the parties’ settlement terms requires time and effort. As seen above, the lawyers must make sure the settlement terms are in accordance with the governing laws and/or court decisions.
Therefore, if you feel you have been illegally discriminated against or harassed because of your sex, age, race, or disability, contact the experienced New Jersey discrimination and civil rights attorneys at Schiller, Pittenger & Galvin, P.C., in their Scotch Plains office at 908-402-4770. Or you can contact us here.