By:  Ty Hyderally, Esq., Francine Foner, Esq., and Tom Daly.

New Jersey courts have endeavored to uphold the notion that discriminatory behavior has no place in employment in the State of New Jersey, and that any employment contract provision or settlement agreement which prohibits victims of harassment from speaking out, offends public policy. The New Jersey Legislature passed a law in March 2019 which supplemented the New Jersey Law Against Discrimination (LAD) to prevent the enforcement of non-disclosure agreements in employment contracts or settlement agreements. N.J.S.A. § 10:5-12.8. The statute expressly applies to non-disclosure agreements, but does not mention non-disparagement agreements (although it specifically exempts non-competition and proprietary information provisions. N.J.S.A. 10:5-12.8(c)(1)-(2)).  The New Jersey Appellate Division recently held that a non-disparagement provision in a settlement agreement of an employment discrimination case (1) did not operate to silence the employee from speaking publicly about her claim of discrimination; and (2) applied only to disparaging statements about the employer’s past conduct, not present or future conduct, given the drafting of the settlement agreement.

In December of 2013, then officer Christine Savage filed a complaint for sexual harassment and discrimination against the Township of Neptune Police Department; Michael J. Bascom, the former Police Director for Neptune Township; and James M. Hunt, the Chief of the Neptune Police Department (collectively, Defendants).  Savage v. Twp. of Neptune, 2022 N.J. Super. LEXIS 74 at *4 (App. Div. Mar. 31, 2022).  This suit resulted in a settlement agreement in May 2014, in which Defendants agreed to promote then-Officer Savage to Sergeant, and to provide her with better access to training. Id.  However, Sgt. Savage continued to experience discrimination and filed suit again in April 2016. Id.  In July 2020, after months of negotiation and mediation, the parties reached the settlement agreement at issue. Id. at *5. The linchpin of the agreement was that Sgt. Savage was allowed to remain employed with the Township, so she could reach her twenty-five years of pensionable service by July 2021. Id. Defendants also agreed to pay Sgt. Savage $175,000 for pain and suffering, $50,354.32 for reimbursement for purchase of pension credits, and $23,206.38 in retroactive pay. Id. at *6. The settlement agreement included a non-disparagement provision, whereby 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.” Id. Sgt. Savage received her settlement payment and was subsequently interviewed by a news reporter on Channel 4, NBC news. Sgt. Savage made the following statements during that interview:

Interviewer: What do you say to other whistle blowers?

Plaintiff: Stand your ground, don’t submit.

Interviewer: But Savage also believes women will continue to face an uphill battle for equal promotions within her department.

Plaintiff: I really don’t think you’re ever going to see another female sergeant, lieutenant, captain or above.

Interviewer: Because?

Plaintiff: Because we’re oppressed. They don’t want women there.

Interviewer: Has it not changed?

Plaintiff: It has not changed, not for a minute. It’s not gonna change, it’s the good ol’ boy system.

Id. at *10-*11.

The interview prompted the Township to file a motion to enforce the settlement, seeking the full amount that Sgt. Savage received in retroactive pay, as well as to compel Sgt. Savage to refrain from making any further disparaging comments. Id. at *8. The motion judge granted Defendants’ motion, awarded Defendants $23,206.38 in damages (the amount of plaintiff’s retroactive pay), and granted Defendants’ application for counsel fees in the amount of $4,917.50. Id. at *15. Plaintiff appealed, and the Appellate Division found that her statements to Channel 4, NBC news were not in violation of the non-disparagement provision, reversed the motion judge’s order, and vacated the award of $4,917.50 in counsel fees.

The Appellate Division recognized that the motion judge’s finding that Sgt. Savage’s statements toward the end of the interview were disparaging or impugned Defendants’ reputation was subject to deference. Id. at *28. However, the Court further opined that the question of whether those statements violated the terms of the settlement agreement was a matter of law, subject to their de novo review. Id.

The Court also found that Sgt Savage’s statements were not comments relating to the details of her claim, but were statements related to present and future behavior. Therefore, the Court held that Sgt. Savage did not breach the non-disparagement provision, because it only prohibited disparaging statements concerning past behavior.

While non-disparagement provisions in agreements to settle employment discrimination claims remain enforceable, the Savage decision strengthens an employee’s right to reveal the details relating to her or his discrimination claims, despite the existence of a non-disparagement provision. In addition, the decision supports an employee’s right to speak out about present and future conduct of an employer, even if the same may be disparaging, where the non-disparagement provision is limited to an employer’s past conduct, if the agreement is written in the manner it was written in this case. This is a victory for employees and former employees who have agreed to settle their claims, but do not want to be silenced.

To read the 2019 law, click here: https://lis.njleg.state.nj.us/nxt/gateway.dll?f=templates&fn=default.htm&vid=Publish:10.1048/Enu.

To view the NBC interview of Christine Savage, click here: https://www.nbcnewyork.com/investigations/police-sergeant-settles-sex-discrimination-suit/2562825/.

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