Christine Savage, a sergeant who worked for the Neptune Township Police Department in New Jersey, filed a lawsuit in December 2013 accusing the Department of discrimination, retaliation, and sexual harassment. The parties ultimately entered a settlement in 2014, promoting Savage to sergeant and providing her with job training. In 2016, Savage filed a second action against the Department, claiming it violated the original settlement agreement and engaged in “sex discrimination, harassment, and retaliation in violation of the New Jersey Law Against Discrimination (LAD), the State Civil Rights Act, and the State Constitution.” That action settled in July 2020 under the following terms: (1) Savage would remain employed until superannuation; and (2) the Department would pay Savage $248,560.70 for pain and suffering, reimbursement for the purchase of pension credits, and retroactive pay. The agreement contained a non-disparagement clause, preventing both sides from “making any statements regarding the past behavior of the parties, which would tend to disparage or impugn the reputation of any party.”
The following month, in August 2020, a television reporter with NBC 4 New York interviewed Savage, who told the journalist she was “abused for about eight years” and that she was being “financially choked out” by the Department. The Department filed a motion to enforce the second settlement agreement, arguing that Savage’s comments to the journalist violated the non-disparagement clause.
The trial court, responding to the Department’s motion, interpreted Section 12.8 of the LAD, which states that a provision in a settlement agreement that “has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment (hereinafter referred to as a ‘non-disclosure provision’) shall be deemed against public policy and unenforceable.” The Court observed that the LAD’s plain language applies to “nondisclosure provisions,” which the Court defined as a “clause prohibiting the parties to an agreement from disclosing to nonparties the terms of the contract and, often, anything related to the formation of the agreement.” However, the Court clarified that the LAD’s clear language does not extend to “non-disparagement provisions.” These are defined as “contractual clauses prohibiting parties from publicly communicating anything negative about each other.”
The Court concluded that “the Legislature could have, but did not, prohibit the enforcement of non-disparagement provisions.” The Court ordered Savage to “abide by the non-disparagement clause” and “directed her to refrain from making any further statements, or conducting any further interviews, which disparage the Defendants in violation of the settlement agreement.”
On appeal, the Supreme Court of New Jersey reversed, finding that this non-disparagement clause had “the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment” in violation of the LAD, and therefore, “shall be deemed against public policy and unenforceable.” The Court emphasized that the non-disparagement clause at issue in this case was broad enough to bar Savage from describing her employer’s discriminatory conduct. LAD explicitly protects this type of speech, and therefore, the Court held that the non-disparagement clause in the contract is against public policy and cannot be enforced.
The Court still made a distinction, highlighting that, in principle, parties can still lawfully agree not to make negative remarks about each other by sharing information. For instance, they could agree not to disclose personal information or matters irrelevant to a discrimination claim, such as “my employer frequently drinks at work” or “cheats on his taxes.” However, any such agreement would need to be very specific to ensure that details related to claims of “discrimination, retaliation, or harassment” could still be made public.
The Court held that the “effect of this non-disparagement clause is to conceal details relating to claims of discrimination, retaliation, and harassment, which is directly contrary to the LAD.” New Jersey legislature enacted Section 12.8 of the LAD in 2019 in response to the #MeToo movement, intending to protect employees so that they might speak freely about discriminatory employer conduct. The Court deemed the non-disparagement clause at issue in this case unenforceable under the LAD, permitting Savage to speak freely about her claims of discrimination, retaliation, or harassment.
Savage v. Twp. of Neptune, 257 N.J. 204 (2024).