NDAs Can’t Silence Everyone: Here’s When You Can Safely Break a Nondisclosure Agreement

Weinstein and the Weinstein Company would face court skepticism if they tried to sue women for violating their non-disclosure agreements

When Zelda Perkins went public on Monday with her accusations that Harvey Weinstein repeatedly exposed himself and propositioned her for sex, she defiantly broke her secret non-disclosure agreement.

“I want to publicly break my non-disclosure agreement,” Perkins told the Financial Times. “I want to call into question the legitimacy of agreements where the inequality of power is so stark, and relies on money rather than morality,” she said. She also wanted reassure other Weinstein accusers that “the sky won’t fall in” if they tell “their own history or their trauma.”

Perkins’ non-disclosure agreement, or NDA, banned her from talking about the 1998 deal worth roughly $200,000 in today’s dollars. But it — and NDAs reached under similar circumstances — may be toothless today, according to attorneys who spoke with TheWrap.For one thing, Weinstein and the Weinstein Company would not want to face the fierce public backlash if they sued Perkins or other Weinstein accusers, said Devin McRae, a Los Angeles entertainment lawyer who has negotiated settlement agreements with secrecy provisions.

“I don’t think they would. I think it would be a very dumb move by them” he told TheWrap. The public would “vilify” Weinstein and TWC for “trying to suppress the information relating to these serious assaults and crimes,” McRae said. (Weinstein has denied any non-consensual sex occurred.)

The Weinstein secrecy requirement also is in danger of being struck down by a judge or arbitrator because it violates the public interest, McRae said. “Given the degree of the decades-long serial sexual predation by their principal Weinstein,” lawsuits against the accusers would be “destined for failure in court,” he said. “There is inarguably a strong public interest in knowing what exactly happened and how it was allowed to happen so much and for so long.”

Weinstein’s non-disclosure agreements probably are toothless for another reason: Weinstein must prove that he has been damaged by the women’s disclosures, which would be nearly impossible, said Debra Katz, a Washington, D.C. lawyer representing employees and whistleblowers, who has negotiated NDAs.

“Because what kind of damages is he going to have? What possibly could anyone say at this point that would harm in terms of his reputation or his business reputation?” Katz told TheWrap.

Sometimes settlement agreements warn accusers they must fork over a pre-determined amount of damages, called liquidated damages, without any proof of damages, said attorney Gloria Allred, who is representing several women who have accused Weinstein of sexual assault and harassment. “Most settlements have a liquidated damages clause with a fixed amount that would need to be paid if a breach was proven. It would, therefore not be necessary to prove actual damages,” she told TheWrap.

But McRae said that liquidated damages provision would go out the window if a court or arbitrator found the secrecy provisions unlawful. “You wouldn’t even get to the liquidated damages,” he said.

Rose McGowan declined to be quoted in the New York Times report that she secretly settled her sexual assault claim against Weinstein in 1997 for $100,000, and backed out of an interview with Ronan Farrow for his Weinstein expose in the New Yorker, citing fears of a lawsuit for violating her non-disclosure agreement, according to the Daily Beast.  McGowan apparently went public in her Oct. 12 tweet saying that “HW” “raped” her.

The New York Times and the New Yorker reported in early October that numerous women have accused Weinstein of sexual harassment and rape over three decades. Over 60 women have accused Weinstein of sexual harassment or sexual assault.

Weinstein initially made a vague apology for the “way I’ve behaved,” but later issued a blanket denial  of any “non-consensual sex.” After the Times and New Yorker reports, TWC fired Weinstein on Oct. 8 and he resigned from the company’s board on Oct. 17.

The Weinstein accusers are not the only ones to attack their gag orders. Gretchen Carlson, a former Fox News on-air personality who settled her sexual harassment lawsuit against then-Fox News chair Roger Ailes for $20 million, has complained about “settlements where you are gagged from ever saying that happened to you.”

But Carlson and other Fox News sexual harassment accusers like Lis Wiehl, who settled her claim against then-Fox News host Bill O’Reilly for $32 million, might be able to break their secrecy agreements, McRae said.

Like TWC and Weinstein, Fox News might want to avoid a public backlash and a court ruling that its secrecy requirements are not enforceable because there is a public interest in learning about “other high-profile offenders who settled claims with similar factual foundations,” he said.