NJLAD doesn't bar nondisparagement clauses in settlement agreements, NJ court rules

The New Jersey Appellate Division partially upheld, and partially overturned, a trial court’s enforcement of a private settlement agreement. Although the agreement’s nondisparagement clause was enforceable and didn’t violate the statutory prohibition against enforcing nondisclosure provisions in harassment/discrimination/retaliation cases, the appellate court held the employee’s allegedly disparaging statements didn’t actually violate the nondisparagement clause as written.

Facts

Christine Savage was a sergeant with the Township of Neptune Police Department for more than 20 years. In 2013, she sued alleging sexual harassment, discrimination, hostile work environment, and retaliation for filing a charge with the U.S. Equal Employment Opportunity Commission (EEOC). In May 2014, the parties settled the claims. The agreement contained a nondisparagement provision.

In 2016, Savage filed new charges alleging continuing sex discrimination, harassment, retaliation, and aiding and abetting discrimination in violation of the New Jersey Law Against Discrimination (NJLAD). She claimed the township violated the letter and spirit of the 2014 settlement agreement because three male police officers were promoted at the same time “thereby sending a message to the rank and file that male dominance of the police department would remain the status quo.”

On July 23, 2020, after three months of negotiations, the parties entered into a second settlement agreement and general release that included a negotiated, mutual nondisparagement provision, which stated in relevant part: