PROPOSED LEGISLATION MAY CURB SETTLEMENT CONFIDENTIALITY AGREEMENTS

Two United State Senators (Herb Kohl, D-Wisconcin, and Lindsey Graham, R-South Carolina) have introduced legislation that would require courts to consider public health and safety against confidentiality before sealing certain information included in settlement agreements. The proposed bill, which was referred to the Senate Judiciary Committee, would “curb the ongoing abuse of secrecy orders in the federal courts,” Kohl told the Senate.

Under the bill, judges must consider public health and safety before granting a protective order or sealing court records and settlement agreements. Judges would have the discretion to grant or deny secrecy based on an assessment that considers public interest in a potential public health and safety hazard and legitimate interests of privacy. The Bill follows dozens of noted cases in which hazards and threats to public health were not disclosed during court settlements and subsequently resulted in additional fatalities, serious injuries, and illnesses.

Senator Kohl cited Bridgestone - Firestone Inc. as the most famous example of the secretive agreements. He said the company settled dozens of lawsuits secretly as tread separations on tires were causing accidents across the country, many resulting in serious injuries and fatalities. However, it was a news report in 1999 that prompted the company to recall 6.5 million tires. By that time, it was too late for the more than 250 people who had been killed and more than 800 injured in accidents related to defective tires.

While this legislation is neither directly related to nor focused on employment law, it is significant to note that, as proposed, many employment and labor litigation settlement agreements may be directed by such a new law (i.e., whistleblowing, OSHA, etc.).