Cain Harassment Allegations Highlight Settlement Agreement Terms

In the past few days, the media has been buzzing about accusations of sexual harassment made against GOP presidential contender Herman Cain when he was chief executive of the National Restaurant Association. The New York Times reported today that there were two women who accused Cain of harassment and received paid settlements; one received $35,000, one year’s salary.

The exact allegations have not been discussed — except by Cain, who has said that he told one of the accusers that she was the same height as his wife. Cain also seems to be the only one speaking on the record about settlement amounts (he stated earlier that one of the accusers received a few months’ pay; the Times got its information from “three people with direct knowledge of the payment,” but no names named as yet). He has also said that an investigation revealed that the accusations had “no basis,” and that he has never sexually harassed anyone.

Now, the lawyer for one of the women has come forward and indicated that his client would like to join the conversation — but she can’t because of a confidentiality clause in her settlement agreement. This is quite common, especially when the settlement agreement is intended to resolve known disputes (as opposed to a standard release of claims, which employees are often asked to sign as a condition of receiving severance pay, for example). Sometimes, a confidentiality agreement requires that only the amount of the settlement be kept secret; sometimes, the agreement covers much more, including the fact that it exists in the first place. An employee who breaches confidentiality might have to pay liquidated damages, return the money paid under the agreement, or agree to some other penalty.

So do Cain’s comments violate the confidentiality agreement? Full disclosure: I have no idea. But one possibility is that he isn’t a party to the agreement at all. If the agreement is between the National Restaurant Association and the accuser, Cain may not be bound by it, personally. Also, confidentiality agreements aren’t always mutual — that is, they don’t always bind the employer as well as the employee. Typically, it’s the employer who wants confidentiality, because it doesn’t want other employees (who may also have claims) to know that it’s willing to settle or for how much.

We may soon find out the details, of both the allegations and the settlement agreement terms: The accuser’s lawyer says he has asked the NRA to release his client from her confidentiality obligations.