In Savage v. Township of Neptune, et al., (A-2-23, decided May 7, 2024), the New Jersey Supreme Court analyzed and invalidated a non-disparagement provision included in a settlement agreement against a plaintiff alleging claims of discrimination and harassment under the New Jersey Law Against Discrimination (“LAD”). Specifically, the Court held that “because the scope of the agreement in this case would bar individuals from describing an employer’s discriminatory conduct, the agreement encompasses speech the LAD protects” and thus, “the non-disparagement clause in the agreement is against public policy and cannot be enforced.”
Plaintiff Christine Savage, formerly employed as a police officer, filed suit alleging that the police department as well as others, engaged in discrimination, retaliation, and sexual harassment. The parties ultimately entered into a settlement agreement that prevented both sides from “mak[ing] any statements . . . regarding the past behavior of the parties, which . . . would tend to disparage or impugn the reputation of any party.”
In August 2020, Savage was interviewed about the case on NBC 4 New York. During the interview, Savage made comments about the township and police department, stating, among other things, that “you [the township and police department] abused me for about 8 years,” she was “being financially choked out,” and “it’s not gonna change, it’s the good ol’ boy system.” In response, the defendants filed a motion to enforce the settlement agreement, arguing that Savage violated the non-disparagement provision. The trial court granted the motion. The Appellate Division reversed the trial court’s decision, finding that the non-disparagement provision was enforceable, but that Savage had not violated it. The New Jersey Supreme Court granted Savage’s petition for certification, and reversed the Appellate Division’s decision.
Specifically, the Court found that the LAD protects Savage’s statements. In so doing, the Court relied on N.J.S.A. 10:5-12.8(a) (enacted in 2019 in the wake of the “#MeToo” movement), which states that a provision in a settlement agreement that “has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment . . . shall be deemed against public policy and unenforceable.” Thus, the Court stated that, “[t]hrough those words, the Legislature removed barriers that previously made it difficult for individuals to report abuse. Survivors of discrimination, retaliation, and harassment now have a legal right to tell their story — a right that cannot be taken away from them by a settlement agreement. Because the scope of the agreement in this case would bar individuals from describing an employer’s discriminatory conduct, the agreement encompasses speech the LAD protects.” Therefore, the Court invalidated the non-disparagement provision at issue.
This ruling has significant ramifications for employers. It is imperative for employers to review boiler-plate non-disparagement provisions with legal counsel to ensure they are narrowly-drafted and comport with this ruling.