However, CDAs usually impose a requirement on employees and contractors to keep all kinds of activities confidential and when disputes arise, CDAs require secret arbitration to resolve the dispute. Activities and disputes that CDAs hide include various illegal tax evasion schemes (discussed here previously), illegal pollution activities, sexual assault and harassment and settlements when consumers are harmed or cheated.
Disputes and settlements arising from a large swath of commercial and private activity are completely shielded from any public scrutiny. In essence, CDAs constitute a vast body of law that is completely private. As usual, the balance of power strongly favors commercial entities and wealthy people who rely heavily on CDAs to hide how they do business and conduct themselves, legal or not.
An article in Vox describes how former Fox News personality Gretchen Carlson came to realize how powerful the CDA shield was in terms of protecting bad acts by companies and individuals from disclosure of sexual harassment. Vox wrote:
Mandatory arbitration clauses mean that many — if not most — cases of sexual harassment are dealt with behind closed doors. Instead of making their way to court, they are settled by arbitrators, independent professionals who are selected to resolve disputes. It’s estimated that more than 60 million Americans have signed such arbitration clauses. Today, the Supreme Court ruled that it’s legal for companies to require employees to sign arbitration clauses in their employment contracts, making it impossible for these workers to bring class action lawsuits against employers over labor disputes.
In July 2016, Gretchen Carlson sued Fox News chair and CEO Roger Ailes for sexual harassment, a move that eventually won her $20 million and encouraged dozens of other Fox employees to come forward. In the end, Ailes was forced to step down. Now Carlson is focusing her efforts on ending forced arbitration, which she signed in her own contract with Fox News, and helping women speak publicly about harassment. She’s not allowed to explain how her lawyers managed to get around the clause, and says that kind of secrecy is part of the problem.
“Very early on, I realized that it was a pervasive epidemic,” Carlson says of mandatory arbitration. “When I filed my suit, I had no idea how pervasive it was across every socioeconomic line and every profession, from Smalltown, USA, all the way to Washington, DC.”The system is heavily rigged in favor of the business entity and wealthy persons who draft the agreements to favor themselves. In theory, a court or government agency acting can require shielded information to be disclosed, but that is rare. CDAs are not supposed to be used to shield illegal activity, but in practice that is what they often do, either directly or indirectly.
Let’s say you’re being harassed. You go to complain to HR. The company wipes their forehead with their hand and goes, “Phew, nobody will ever know about this,” because of these clauses. Then you get thrown into forced arbitration where, oftentimes, the company picks your arbitrator for you. You don’t get the same number of witnesses and depositions [as you would in court]. Rarely does the employee win — only 20 percent of the time. And there are no appeals.
Then you could get fired because once you bring a harassment or discrimination claim, companies rarely keep you on. So now you’re out of a job and can’t ever tell anyone why you had to leave. Also, with arbitration, because it’s secret, the perpetrator oftentimes gets to stay on the job — again, because no one knows the person has been accused — to harass again.
Carlson recently published an opinion piece for the New York Times. She wrote:
When my retaliation and sexual harassment complaint against Roger Ailes, the former Fox News chairman and C.E.O., went public in 2016, there were no #MeToo or Times Up movements to help rally support for my cause. .... When I sued, I could have never known that my story and the stories of other women at Fox would turn into both a television mini-series and a film, and, more important, that I would be prohibited from speaking about these projects.
“Winning” my complaint with a settlement and a nondisclosure agreement meant I was, essentially, forced into silence. .... Although NDAs usually prohibit employers from disparaging victims, whisper campaigns often follow women for years. As I documented in my book “Be Fierce,” the vast majority of survivors never work in their chosen professions again. American industry has lost many talented women to harassment, while allowing predators to continue climbing the professional ladder (where they have the potential to victimize even more women).
There are those who say to victims, “You took money in exchange for staying quiet, so what’s the problem?” and “If you want to talk, give your settlement money back.” These sentiments miss the point and perpetuate the lie that victims benefit from being sexually harassed. First of all, buying silence instead of stopping harassment is immoral and unjust. Next, the settlements are made not just in exchange for secrecy, but to make up for lost wages, because once you find the courage to come forward, your “reward” is often that you’ve lost your job (and potentially your career). And lastly, NDAs foster a culture that gives predators cover to commit the same crimes again. (emphasis added)One can argue that far too much commerce in America is conducted in unwarranted secrecy. The secrecy shields far too much illegal and immoral activity. The public is unaware of how rigged the arbitration system is and they have no way to opt out. Credit card companies all require forced arbitration and secrecy about settlements. Arbitration settlements from harmed consumers are kept secret so that people cannot know what the relative value of their case may be when they are injured. The secrecy system to hide immoral and illegal acts is itself both unfair and immoral.
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