The recent revelations concerning the grotesque and likely unlawful sexual aggressions perpetrated by movie mogul Harvey Weinstein over many years have prompted me to revisit the evolving body of law concerning the rights of “whistleblowers.”
For some time the SEC and other Federal agencies have taken the position that obligations contained in standard confidentiality or non-disclosure agreements purporting to restrain employees from reporting wrongdoing may not be enforced. The SEC has gone further, interpreting its Rule 21-F17(a) as prohibiting any confidentiality agreement that does not include an express whistleblower carve-out for the reporting of securities law violations. In fact, the SEC has gone as far as suggesting that it would take action against any attorney that drafts such a non-complying agreement (In the Matter of KBR, Inc.). Other parts of the Federal Government have also endorsed whistleblower carve-outs (e.g, Department of Labor, EEOC, NRLB).
So you may fairly ask me at this point what my esoteric and nostalgic tour of the law concerning non-disclosure agreements has to do with the ugly revelations about Harvey Weinstein? Simply this: The Weinstein Company (and Miramax before it) are widely reported to have required employees and third parties to sign very strict non-disclosure agreements. I think Congress should pass a law prohibiting the enforcement of any confidentiality, non-disparagement or similar non-disclosure agreement against any whistleblower that comes forth to report any crime in general, and sexual aggression/harassment in particular. If this Republican Congress refuses to act, or the Predator-in-Chief vetoes the legislation, California and New York States should act as these states are home to most of the entertainment industry which has for too long condoned the “casting couch.”
It already takes great courage for the victims of sexual aggression to come forward and complain about the powerful men (yes, almost always men) who seek to leverage their wealth and power for sexual favors. They should not be required to risk the high cost and uncertain outcome of litigation to bring their stories to light.
I do not mean to gloss over the distinction between reporting alleged crime to the authorities versus telling the story to the media in violation of a non-disclosure agreement. Here legislators will need to balance the legitimate desires of organizations to maintain confidentiality versus the importance of having multiple victims come forward with their testimony. I for one would lean in favor of public disclosure with perhaps a standard such as the reckless disregard of the truth recognized under Frist Amendment precedent for alleged libels of public figures.
Since the Great Financial Crisis we recognize as a matter of good public policy that whistleblowers should be protected to encourage them to come forward and report wrongdoing at our financial institutions. After Weinstein, Ailes, O’Reilly, Cosby and Trump we should accept no less in the entertainment industry or elsewhere.