Non-Disparagement Clause Cannot Prevent Employee From Discussing Discrimination

Today, the New Jersey Supreme Court ruled that the New Jersey Law Against Discrimination (“LAD”) prohibits non-disparagement agreements that have the impact of preventing an employee from discussing the facts of their discrimination, harassment or retaliation claim.

Non-disparagement clauses are very common in settlement agreements in employment law cases.  Typically, they prevent the employee from saying anything negative about their former employer.

Court rules non-disparagement agreements violate New Jersey Law Against DiscriminationThe case interpreted a 2019 amendment to the LAD that was passed in response to the #MeToo movement.  Specifically, the legislature amended the LAD to deem that any provision in a settlement agreement that “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.”

Police Sergeant Christine Savage challenged the non-disparagement clause that was included in her settlement agreement with the Neptune Police Department after she settled her second gender discrimination, harassment and retaliation lawsuit against it.

After signing the settlement agreement, Sgt. Savage spoke to a television news reporter.  During the interview, she made numerous negative comments about the police department relating to gender discrimination and retaliation, including saying that:

  • The Neptune Police Department abused her for approximately 8 years;
  • The harassment and retaliation “intensified with bogus disciplinary charges”;
  • The Department put her on an unpaid leave of absence after it found her to be unfit for duty during a psych exam that she claims was a setup;
  • She believes “women will continue to face an uphill battle for equal promotions” in the Police Department;
  • The Police Department oppresses women because it does not want them there; and
  • The Police Department has not changed and is not going to change, but rather is a “good ol’ boy system.”

After it learned that Sgt. Savage had disparaged it, Neptune filed a motion to enforce the non-disparagement clause in her settlement agreement.  The trial court ruled that the 2019 amendment to the LAD applies only to non-disclosure and confidentiality agreements, rather than to non-disparagement clause.  Accordingly, it concluded that the non-disparagement clause in Sgt. Savage’s settlement agreement was enforceable, and that she had breached it

As discussed in our article, Non-Disparagement Clauses Do Not Violate New Jersey Law Against Discrimination, on appeal the Appellate Division agreed with the trial court about the scope of the amendment to the LAD.  However, it concluded that Sgt. Savage did not violate the non-disparagement provision because the clause only prohibited disparaging statements about “past behavior,” and her statement were all about ongoing and future behavior.

However, the New Jersey Supreme Court disagreed with both of the lower courts.  In its May 7, 2024 opinion in Savage v. Township of Neptune, the Supreme Court ruled that the 2019 amendment to the LAD prohibits any agreement that bars an individual from describing an employer’s discriminatory or retaliatory conduct, including a non-disparagement clause.  Accordingly, it ruled that Neptune cannot enforce the non-disparagement clause in Sgt. Savage’s settlement agreement because it violates the LAD.

In doing so, the Supreme Court made it clear that, at least in theory, “parties can agree not to disparage one another by disclosing information that has nothing to do with details relating to claims of discrimination, retaliation, or harassment.” However, it made it clear that any such provision would have to be “narrowly drawn” to ensure that details relating to claims of unlawful discrimination, harassment and harassment still could be publicly revealed.

In addition, the Supreme Court concluded that Sgt. Savage can make an application to recover her attorney’s fees from Neptune because its efforts to enforce the non-disparagement provision violated the LAD.

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