SAVAGE V. TOWNSHIP OF NEPTUNE: UNDERSTANDING THE IMPACT ON NON-DISCLOSURE PROVISIONS FOR EMPLOYERS

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On May 7, 2024, in Savage v. Township of Neptune, the Supreme Court of New Jersey unanimously held that any provision in an employment contract or settlement agreement, including a non-disparagement provision, that has the purpose or effect of concealing details relating to claims of discrimination, retaliation, and harassment is unenforceable and against public policy. The Court made clear employers cannot prevent a plaintiff from discussing the details relating to a claim of discrimination, retaliation, or harassment, and survivors have the right to speak about their experiences in any number or ways and can no longer be restrained by confidentiality provisions in employment contracts or settlement agreements. 

The case involves Christine Savage, a police officer who filed a lawsuit alleging sexual harassment, sex discrimination, and retaliation against the Neptune Township Police Department. The parties eventually entered into a settlement agreement in 2014, which included a non-disparagement clause. Savage later filed a second lawsuit in 2016 alleging continued and intensified discrimination, harassment, and retaliation. As a result, in 2020, the parties entered into a second settlement agreement, which also included a non-disparagement clause. A television reporter interviewed Savage for comment about the matter, and Savage asserted among other things, she had been “subjected to unfair assessment, arbitrary internal affairs investigations, discriminatory work assignments, discriminatory performance standards and evaluations, and more strident scrutiny, monitoring and oversight.”  Savage also asserted the department violated procedures and ordinance including promoting males over females, failing to train and supervise employees on anti-harassment and anti-retaliation policies, and fostered a discriminatory, harassing and retaliatory atmosphere. Based on such statements, the Township of Neptune sought to enforce the non-disparagement clause, arguing that Savage had violated its terms by discussing her case and making statements about those she believed had harassed her on the television news segment.

The trial court granted the defendants’ motion to enforce the second settlement agreement, finding the New Jersey Law Against Discrimination (“NJLAD”) barred only non-disclosure and confidentiality agreements, and that Savage instead violated a non-disparagement clause, which was enforceable. The Appellate Division affirmed in part and reversed in part, holding that the non-disparagement clause was enforceable, but that Savage had not violated it, as the Court found Savage’s comments towards the end of the interview were about present or future behavior not past behavior and the plain language of the agreement barred only comments about past behavior. The New Jersey Supreme Court ultimately disagreed with both lower courts, holding that any provision, including a non-disparagement provision, that has the effect of concealing details relating to claims of discrimination, retaliation, and harassment is unenforceable and against public policy. The Court reversed in part, affirmed in part, and remanded the case.

Crucially, the case turned on the meaning of a section in the NJLAD, specifically N.J.S.A. 10:5-12.8(a) which states:  “A provision in any employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment (hereinafter referred to as a “non-disclosure provision”) shall be deemed against public policy and unenforceable against a current or former employee (hereinafter referred to as an “employee”) who is a party to the contract or settlement. If the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the non-disclosure provision shall also be unenforceable against the employer.” Importantly, the Court looked at the legislative intent behind N.J.S.A. 10:5-12.8(a), which was enacted by the Legislature in the wake of the #MeToo movement to remove barriers that previously made it difficult for individuals to report abuse. In determining intent, the Court notes that the NJLAD is remedial legislation and, therefore, must be liberally construed.  The Court highlights that survivors of discrimination, retaliation, and harassment now have a legal right to tell their story, and the right is one that cannot be taken away by a settlement agreement.  The Court also notes that the statute was enacted to protect individuals from being silenced by settlement agreements and employment contracts.

Although the facts of this case involve a non-disparagement provision, the Court made it clear that the statute applies to both non-disclosure and non-disparagement provisions.  The Court noted that labels do not control the meaning of the statute.  Therefore, the facts interpreting the matter apply equally to both types of provisions.

The Court further noted that the word “a,” as in “relating to a claim,” does not distinguish between claims that give rise to a settlement agreement and others that do not.  It also does not distinguish among past, present, or future claims.  The statute encompasses all these claims.  Additionally, the Court interprets “details relating to a claim” to cover not just details that relate “directly” to the claims, but also those that relate more generally or indirectly to those claims. The Court notes that the statute’s protections extend beyond statements made in pleadings or courtrooms, as survivors have the right to speak about their experiences in any number or ways and can no longer be restrained by confidentiality provisions in employment contracts or settlement agreements.  The Court reasoned the statute’s language leaves no room for ambiguity and it encompasses all claims, irrespective of their outcome or timing, and extends its protective umbrella to all statements made by individuals regarding their experiences of discrimination, retaliation, or harassment. The Court goes further to lift any remaining limitations in place on what Savage may say about her claims of discrimination, retaliation, or harassment.

Conceptual Implications

This case has garnered attention from legal practitioners and employers alike, as it raises questions about the scope of the NJLAD and the enforceability of confidentiality provisions in settlement agreements. In the aftermath of the Savage v. Township of Neptune case, employers are urged to reevaluate their approach to non-disclosure provisions within employment contracts and settlement agreements and underscores the need for a nuanced approach to addressing discrimination, retaliation, and harassment in the workplace. While the Savage ruling introduces constraints on non-disclosure provisions, it’s imperative for employers to explore alternative mechanisms for protecting confidential information and mitigating reputational risks. This may entail implementing robust internal reporting mechanisms, fostering a culture of transparency, and reinforcing ethical standards across the organization.


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