Non-disparagement clauses in settlement agreements are provisions designed to prohibit designated parties from making negative, critical, or disparaging statements about the releasing party or each other. Until recently these clauses were used in employment settlement agreements to prevent claimants from bad-mouthing former employers or associated parties, or more broadly, to prevent settling parties from discussing the claims which served as the subject of the settlement agreement. However, in Christine Savage v. Township of Neptune, 2024 N.J. LEXIS 377 (2024), the New Jersey Supreme Court held that the use of non-disparagement clauses in settlement agreements resolving claims of discrimination, retaliation, and harassment are unenforceable. This pivotal ruling emphasizes the legal protections granted to individuals who wish to disclose their experiences of discrimination in the workplace thereby reinforcing the principles upheld by the New Jersey Law Against Discrimination (LAD).

In 2013, Christine Savage, a police sergeant in the Neptune Township Police Department (NTPD) brought a lawsuit against the NTPD claiming she was the victim of pervasive sexual harassment, gender discrimination, hostile work environment and retaliation. Her legal claims against the NTPD were settled in 2014 with the parties entering a settlement agreement which included promises of future promotion and training for Savage. Also included in the agreement was a non-disparagement clause which aimed to prevent her from speaking out about her experiences of harassment, discrimination, and retaliation when working for the NTPD. Unfortunately, the discriminatory and harassing behaviors sought to be remedied by the 2013 lawsuit not only continued but intensified according to Savage. This ongoing mistreatment compelled Savage to file a second lawsuit in April 2016 asserting similar claims against the same defendants as in the 2013 lawsuit but also claiming the defendants had breached the settlement agreement by failing to comply with its material terms.

Specifically, the second complaint filed by Savage in 2016 alleged the NTPD subjected her to unfair assessments, arbitrary internal affairs investigations, and overall directed more severe scrutiny of Savage’s actions as compared to her male counterparts on the police force. This second lawsuit resulted in a settlement agreement being entered between Savage and the NTPD in July 2020 which included a non-disparagement clause. After the settlement agreement was fully signed by all parties, Savage participated in a television interview where she discussed the discrimination she claimed she was forced to endure at the NTPD. The interview was considered by the NTPD as a violation of the non-disparagement clause and lead to another legal dispute over whether Savage had a legal right under the LAD to speak about these matters notwithstanding the terms of the non-disparagement clause.

In a unanimous decision, the New Jersey Supreme Court relied heavily on language contained in N.J.S.A. 10:5-12.8(a), which reads in relevant part, “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 …  shall be deemed against public policy and unenforceable against a current or former employee … who is a party to the contract or settlement.” This provision in the LAD was enacted by the New Jersey Legislature in 2019 in the aftermath of the #MeToo movement. The inclusion of this language into the LAD was designed to prevent employers from using employment contracts and/or settlement agreements to conceal details of discrimination, harassment, or retaliation claims.

Since the enactment of N.J.S.A. 10:5-12.8(a), non-disclosure provisions are supposed to be deemed unenforceable as to the underlying facts of discrimination and harassment, thereby allowing victims of discrimination to tell their story. The Supreme Court in Savage found that the term “no-disclosure provision,” encompasses not only traditional confidentiality clauses but also non-disparagement clauses that serve to conceal the same abuses. The Supreme Court held that any contractual clause that has the purpose or effect of silencing a current or former employee from discussing the discrimination or harassment they endured is contrary to public policy and, therefore, is unenforceable. In doing so, the Court unequivocally found that victims of discrimination and harassment have the right to discuss their experiences. This important decision is particularly significant as it widely interprets legal protections to support victims of discrimination, allowing them to share their experiences without fear of legal consequences or breaching contractual terms.

The Savage decision now allows individuals who have been discriminated against to speak out against discriminatory practices without the threat of legal ramifications. The decision ends the practice of using non-disparagement clauses as a legalese way of silencing victims of discrimination from speaking about their experiences. Hopefully, the Savage decision will further incentivize employers to undertake prompt remedial measures to eradicate workplace discrimination and actively promote work environments to be free of harassment and retaliation.

If you believe you are or have been a victim of unlawful workplace discrimination or retaliation you are urged to call the attorneys at Mashel Law (732) 536-6161 or fill out the contact form on this page for immediate help. Mashel Law, located in Marlboro, New Jersey, is dedicated to protecting the rights of New Jersey employees.

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