It is also important to keep in mind that the use of NDSS does not only occur in the context of transactions, but also concerns confidentiality clauses in employment contracts. Many employees are expected to sign and return their contract within the first few minutes of their employment. This often does not give staff enough time to properly assess what can create problems at a later stage. The initiative for this article is a series of proposed comparative agreements that have been presented to me in recent years as counsel for the plaintiff in cases ranging from double counting at Wells Fargo Bank to workplace discrimination and identity theft with credit card companies. In all of these cases, the defendants routinely devised and proposed provisions in settlement agreements that contained confidentiality provisions with respect to gag orders, non-denigration, non-eviction clauses, non-participation in other trial clauses, and extremely broad declassifications. Congratulations! You have just negotiated an amount to settle your client`s case. This is the beginning of fun. Your opposing lawyer sends you a proposed settlement agreement, with conditions that make you blow the wind. You want a gag order that, in addition to making the terms of the agreement confidential, prevents your client from talking about what happened to her. They want to prevent lawyers from mentioning the public facts of the case on websites. You don`t mind keeping the terms of the transaction confidential, but the rest of the rules remain in your business.
Nevertheless, your customer wants to settle down. So, what leverage do you have? Confidentiality clauses are not only intended to keep secret between the parties the amount and other specific provisions of the transaction that are allowed. Instead, they seek to conceal from the public and the press the voluntary disclosure of relevant evidence to other parties to the trial and to prohibit a plaintiff from settling scores from continuing to publish the allegations in briefs filed in public courts. Such testing is prohibited under two standard rules of professional conduct — regulation 3.4 (f) and 5.6 (b). Plaintiffs` lawyers have an ethical duty not to accept them.2 Confidentiality clauses that boil down to gag orders are now routine. When I started practicing as a lawyer in the early 1970s, they were unknown. When a case was filed publicly, the settlement agreement did not contain a confidentiality clause and the facts and accusations open to the public were free for lawyers, clients and the press. Not anymore. Confidentiality agreements are typically used by employers to prevent employees from disclosing information that could have a significant impact on the company`s reputation or funding.
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