New Jersey high court will weigh legality of non-disparagement agreements

The New Jersey Supreme Court has agreed to weigh whether a state ban on certain non-disclosure agreements extends to similar agreements that bar workers from bad-mouthing their past employers.

The case stems from a lawsuit lodged by former Neptune Township police sergeant Christine Savage, who claims a non-disparagement agreement she and the township entered into is barred by a 2019 state law that bans the use of some workplace non-disclosure agreements.

After settling with the township over her workplace claims for nearly $250,000 in 2020, Savage told NBC New York that Neptune Township’s police department had done little to change its culture and remained a “good old boys club,” a charge the department said violates the agreement.

A Superior Court judge agreed, but an appellate panel found Savage’s comments were not barred by the agreement because it only barred disparaging comments on past behaviors, not current conditions.

Still, the appeals court found the state’s 2019 ban on non-disclosure agreements in cases involving workplace harassment, retaliation, or discrimination does not extend to non-disparagement agreements. Some legislative sponsors have said it should.

“We are pleased the New Jersey Supreme Court will be evaluating an important issue: whether employers can make an end run around the ban on confidentiality clauses in settlement agreements involving sexual harassment in the workplace by calling them non-disparagement clauses. Workers should be protected from this practice, which defeats legislative intent and chills speech,” said Donald Burke, an attorney representing Savage.

New Jersey enacted its limited ban on non-disclosure agreements after a high-profile sexual assault allegation lodged by former Murphy administration official Katie Brennan against Al Alvarez, who led Muslim and Latino outreach for Gov. Phil Murphy’s 2017 campaign.

Brennan in 2018 accused Alvarez of sexually assaulting her in April 2017. Alvarez, who was chief of staff at the Schools Development Authority before the allegation became public, has denied any wrongdoing.

The high court on Tuesday also denied a bid by New Jersey’s Moderate Party to hear its arguments that New Jersey should allow for fusion voting. The party’s lawyers said the case, now being heard by the Appellate Division, should go right to the Supreme Court so it can be decided in time for next year’s midterm elections.

Tuesday’s decision by the court means the case will remain in the Appellate Division until judges there decide on it.