Abuses hide in the silence of nondisparagement deals
CLAUSES ARE INCREASINGLY FOUND IN EMPLOYMENT CONTRACTS IN MANY INDUSTRIES
n October, AngelList, a company that helps tech start-ups raise money and hire employees, held an office retreat. In the Hollywood Hills, far from Silicon Valley, the firm’s mostly male staff mingled poolside with bikini-clad women who had been invited to the event.
Before the afternoon was over, Babak Nivi, a founder and board member at AngelList, said things that made Julie Ruvolo, a contractor, uncomfortable about working at the company. His comments included a suggestion that the women, who were not employees, warm up the pool by jumping in and rubbing their bodies together. The incident was described by two entrepreneurs who were told about it in the weeks after it occurred but were not authorised to speak about it.
Precisely what occurred at the Hollywood Hills event and the details of the agreement are not publicly known. Several weeks after the party, each side signed a nondisparagement clause as part of a settlement, the two people said. And neither Ruvolo nor AngelList are permitted to talk about what happened that day.
As more harassment allegations come to light, employment lawyers say nondisparagement agreements have helped enable a culture of secrecy. In particular, the tech start-up world has been roiled by accounts of workplace sexual harassment, and nondisparagement clauses have played a significant role in keeping those accusations secret. Harassers move on and harass again. Women have no way of knowing their history. Nor do future employers or business partners.
Nondisparagement clauses have become so common that the Equal Employment Opportunity Commission, which AngelList said Babak Nivi, a founder and board member at AngelList has no role at the company and is no longer a board member, but would not say when or why he left the board.
“When we conduct investigations, individuals are removed from the workplace, given counselling if needed, and can’t contact complainants,” Graham Jenkin, AngelList’s chief operating officer, said in a statement. “Any implication that we would silence anyone or not pursue an issue is mistaken.”
Jenkin would not say whether AngelList had a nondisparagement agreement with Julie Ruvolo, a contractor or whether Nivi had harassed her. He disputed some of the details of the poolside incident described to but would not provide clarification. Ruvolo, who was a freelance writer for AngelList and whose contract was not renewed this year, said she could not comment on the event that led to her agreement or on the terms of the deal. “Companies wave the agreements around and use them to force a settlement and make the problem go away,” said Karen Kessler, chief executive of the public relations firm Evergreen Partners. “After that nobody is the wiser for it.” enforces federal discrimination laws, and the National Labour Relations Board, a federal agency that protects workers’ rights, have been studying whether they are having a chilling effect on workers speaking up about wrongdoing or filing lawsuits, said Orly Lobel, a law professor at the University of San Diego.
Constitutional rights
Employees increasingly “have to give up their constitutional right to speak freely about their experiences if they want to be part of the workforce,” said Nancy E. Smith, a partner at the law firm Smith Mullin. “The silence sends a message: Men’s jobs are more important than women’s lives.” At Binary Capital, a venture capital firm in San Francisco that collapsed last month under the weight of multiple sexual harassment allegations, new hires signed an employment contract that included the clause that “employee shall not disparage the company,” according to a contract quoted in a lawsuit filed against the firm last month.
Ann Lai, a former employee, said in her lawsuit filed in San Mateo Superior Court in California that she had complained to her bosses about sexism, discrimination and inappropriate behaviour in the workplace, and that Binary used the nondisparagement provision in her employment contract to threaten her and prevent her from talking about why she had quit her job.
The nondisparagement clause made it “hard for employees to ‘speak up’ about inappropriate or illegal conduct,” according to the suit. “Employees are instead led to believe that it is illegal to do so, and that disclosing information about their working conditions will lead to ruinous litigation.” The founders of Binary Capital, Justin Caldbeck and Jonathan Teo, did not respond to a request for comment on their firm’s employee contract clause. Chris Baker, an employment lawyer at the law firm Baker Curtis & Schwartz who represents Lai and has sued Google over broad nondisclosure provisions, declined to comment specifically on Lai’s case.
When Caldbeck worked at Lightspeed Venture Partners, he attended board meetings at the e-commerce company Stitch Fix, on behalf of the firm. After Lightspeed was informed that Caldbeck had made Katrina Lake, the Stitch Fix chief executive, uncomfortable, Caldbeck was removed from his role on the board, according to three people with knowledge of the matter. Spokeswomen for Lake and Lightspeed declined to comment. The company and Lake signed a mutual nondisparagement agreement in 2013, according to a copy of the agreement obtained by the news site Axios.
Caldbeck left Lightspeed the next year, but the reason he was removed from Lake’s board was not made public.
At Binary, in text messages reviewed by The Times, he requested evening meetings with an entrepreneur named Lindsay Meyer, asked if she was attracted to him, and if she would accompany him on overnight trips. He also questioned why she would rather be with her boyfriend than with him.
Caldbeck would not comment about the incidents at the two firms.
In its buyout agreements, The New York Times asks employees to agree to a limited nondisparagement clause that specifies the agreement does not prohibit people from providing information about legal violations or discrimination to the government or regulators. The terms of other nondisparagement agreements vary.
In addition to Ruvolo, three other women who work in the technology industry told The Times that they had been harassed in the workplace and signed nondisparagement agreements to settle those disputes. The women would not say more because they are not allowed to acknowledge that the agreements even exist.
“I wonder how I may have disserviced other women working in tech, including my female colleagues, with my silence,” Ruvolo said. “I think we need to rethink what it means to ask for or grant silence as resolution.”