What happens in New Jersey has national implications. Early this month, Missouri Attorney General Josh Hawley made good on his promise to release details on confidential settlements as well as the costs and fees associated for them for a number of lawsuits that plagued the state government just this year alone. Two of the large cases showed one settlement for over $1 million in the Department of Labor and one in the Department of Social Services for $2 million.
When the Attorney General called for the reports earlier in the year, he was quoted as saying, “Missouri citizens deserve a transparent and accountable government, especially in the expenditure of their tax dollars.”
Halfway across the country, members of the legislature in the State of New Jersey agree, as their state’s general assembly has recently passed similar legislation effectively banning confidential settlements in cases of government harassment and misconduct. But is a ban on confidential settlements a good idea?
Confidential settlements coming under fire in many states
In the recent months, the use of secret or confidential settlement agreements has come under fire in many states. The New Jersey General Assembly had recently passed a bill that would prevent both state and local governments from creating confidential agreements with whistleblowers and South Dakota also introduced a bill requiring a court order to allow a settlement to be considered confidential.
In 2014, Iowa’s governor issued an executive order ending secret and confidential settlements between the state their employees in response to learning that the state had paid out almost $700,000 of taxpayers’ money to handle these cases and settlements. There are many people pushing for this same need for transparency in all states not only because they are using taxpayer money to fund these settlements without the knowledge of the taxpayers, but they also feel that it will perpetuate government misconduct if the whistleblowers aren’t allowed to speak out publicly.
A St. Louis attorney in favor of transparency was quoted as stating, “confidentiality clauses in agreements with the government largely serve as a mechanism to keep wrongdoing from coming to light. It significantly reduces incentive for the government to solve or correct the underlying problem.”
What led the New Jersey general assembly to seek more transparency?
While the amount spent on secret settlements pushed the new attorney general to adopt some transparency procedures, there were cases in the state that led the charge for settlements to become publicly available. A New Jersey case in 2010 against three officers in a local police department led to an indictment on charges of falsifying documents and misconduct. Though the case never made it to court as the new attorney general dismissed it.
When the case was killed, an assistant prosecutor, Bennett Barlyn claimed that the attorney general had stopped the case for political reasons, a charge which he vehemently denied. In response to the statement, the assistant prosecutor was terminated. After Barlyn filed a wrongful termination suit, a four-year legal battle ensured with him being awarded $1.5 million in the end. Part of the agreement required strict confidentiality and he was unable to publicly disclose information about the improper action of state officials that the judge had recently allowed him to do.
What is next for New Jersey whistleblower cases?
When it comes to confidential settlements, the recent legislation in New Jersey is primarily to take aim at the secret settlements that are often part of the agreement in state whistleblower cases. A recent legislation passed by the General Assembly would prevent the state into entering into confidential agreements with whistleblowers and the settlements would be made a matter of public record and could be accessed through public record requests.
Though some opponents feel that the transparency could actually hurt the cases of whistleblowers. Employment lawyer Bennet Zurkofsky expressed the sentiment in his statement, “when you sue an employer, they will try to dig up as much on the employee as possible, do everything they can to undermine his credibility.” This could result in unnecessary exposure of a whistleblower’s private information.
Advocates for more transparency feel that it will give the government greater accountability both with the way in which they spend taxpayers money as well as how they handle cases of misconduct.