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Thursday, April 28, 2016

Non-Disparagement Agreements With the Government and the First Amendment

Eugene Volokh wrote yesterday about a settlement agreement between a former employee of a Veterans Affairs Hospital in Washington. The settlement agreement, entered into by the parties in January 2013, contained a provision barring the former employee from:
. . . making any complaints or negative comments to any member of Congress or their staff, or any newspapers or media or their staff, or any other public forums, about the facts of this Settlement Agreement or the facts or conditions that led up to this Settlement Agreement.
Volokh notes that the Equal Employment Opportunity Commission recently found that the provision above violated the former employee's First Amendment rights.  I have written previously about non-disparagement agreements in the context of contracts between private parties. As I argued in that post, non-disparagement agreements hidden in contracts of adhesion between large companies and private consumers may be unconscionable and therefore unenforceable.

Non-disparagement agreements that are parts of settlement agreements between private parties are a different story. Typically, the parties are both represented by counsel and reach the settlement agreement after negotiation over the agreement's terms. If those terms contain a provision prohibiting one of the parties from disparaging the other, or speaking about the facts giving rise to the litigation, the term will likely be enforceable as a negotiated provision of an agreement. From prior research, I am aware of the Maryland Court of Special Appeals opinion in Smelkinson Sysco v. Harrell holding this to be the case, and Volokh cites Cohen v. Cowles Media in support of this claim.

But what of non-disparagement agreements between private parties and government entities? These agreements appear to raise First Amendment concerns because government action is involved. Volokh's post highlights one such example. Julia Craven points out similar provisions in settlement agreements reached in excessive force lawsuits against police officers. Does prohibiting the private party from speaking about the facts giving rise to the litigation violate that party's first amendment rights?

Volokh thinks it might:
Now whether such agreements, entered into by the government, are constitutional is a complicated question. Private parties often do enter into various confidentiality and nondisparagement agreements, and they’re generally enforceable. (See, e.g., Cohen v. Cowles Media Co. (1991).) The government is subject to First Amendment constraints, even when it’s acting as contractor; and I’m inclined to think that such a nondisparagement agreement, aimed solely at preventing embarrassment to the employer (rather than, say, preserving client privacy or national security secrets), is unconstitutional. Still, it’s not completely clear what the rules are here.
I disagree with Volokh's inclination (although I agree that the rules are unclear). If the parties have reached a negotiated settlement agreement in which a private party agrees to curtail his or her speech in exchange for a monetary payment or other action by the government, this strikes me as a negotiated waiver of First Amendment rights. Waivers of constitutional rights may be permitted if they are knowing and voluntary -- consider, for example, the vast majority of criminal cases resolved through plea bargains where defendants give up their right to a jury and right to confront witnesses (see also: DH Overmyer Co. v. Frick Co. for a more general discussion of waivers).

Knowing and voluntary waivers of First Amendment rights may also be constitutional. In Leonard v. Clark, the Ninth Circuit upheld the Portland Fire Fighters Association's agreement with the City of Portland providing in relevant part that legislation supported by the Union that resulted in increased payroll costs to the City would be charged against the applicable salary agreement with the Union. The Union contended that this violated its First Amendment right to petition the government, and the Ninth Circuit disagreed, holding that the Union had made a knowing, voluntary, and intelligent waiver of its First Amendment rights.

Another example is Estate of Barber v. Guilford County in which the Court of Appeals of North Carolina upheld a settlement agreement between a private party and the Guilford County Sheriff's Department in which the private party agreed not to use the term "murder" with respect to a certain Deputy. The Court of Appeals found that the waiver of First Amendment rights was knowing and voluntary, and therefore enforceable.

While I think that there is a decent argument that parties can be permitted to knowingly and voluntarily waive their First Amendment rights in a negotiated settlement with the government, the case law on this topic is underdeveloped. As discussion on these provisions in the public and private context continues, I look forward to seeing how the courts treat these agreements.

On the other hand, should awareness of non-disparagement agreements continue to grow, I would not be surprised if government entities began shying away from them. As Volokh points out, the presence of such agreements raises serious political accountability questions. If more people learn that government entities are requiring parties to sign non-disparagement agreements, speculation over what the government is trying to hide may end up being more damaging than the facts themselves.

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