From the Weinstein Co. to the White House, nondisclosure agreements have come to be associated with the rich and powerful covering their tracks.
Hollywood producer Harvey Weinstein reportedly used the contracts to intimidate his accusers into silence. President Trump allegedly entered into a deal to keep Stormy Daniels, an adult film actress whose real name is Stephanie Clifford, quiet about an extramarital affair she said took place in 2006.
Debra Katz, a founding partner at the employment law firm Katz, Marshall & Banks, said there are two types of nondisclosure agreements.
The first is “where someone goes into a job, like in the Weinstein Co. as an example, that employees, just as a condition of working there, have agreed not to say anything about their employer, their personal lives, etc.,” Ms. Katz said recently on NPR’s “The Takeaway.”
“And then there’s a second type of NDA, which is when someone, like Stormy Daniels, enters into a settlement agreement,” she said. “They agree to not disclose or not disparage the person that they’re entering into the contract with.”
Ms. Clifford is suing Mr. Trump to get out of the NDA she signed in the weeks leading up to the 2016 election. Mr. Trump’s personal lawyer, Michael Cohen, said he paid Ms. Clifford $130,000 without the president’s knowledge. Mr. Trump has denied the affair and said he knew nothing about the nondisclosure agreement.
The contract was made public when Ms. Clifford appended it to a complaint filed in California Superior Court. She filed a lawsuit seeking a declaration that the agreement is invalid because the other party, who goes by the pseudonym “David Dennison” in the contract, never signed it.
The agreement bars Ms. Clifford from disclosing the other party’s “business information, familial information, any of his alleged sexual partners, alleged sexual action, or alleged sexual conduct,” among other things. She’s also prohibited from acknowledging the existence of the contract.
The agreement requires Ms. Clifford to pay $1 million in damages per item disclosed. An arbitrator is given the right to “impose all legal and equitable remedies,” and neither party has the “right of appeal or review.”
Ms. Katz said that part of the contract is unlikely to be enforced.
“Courts can invalidate the penalty clause, the liquidated damage clause, in an NDA if the court finds that it’s punitive — it’s designed to penalize and punish, not to compensate for the breach,” she said. “So, in a situation where they’re claiming to sue Stormy Daniels for $20 million for breach? Good luck with that.”
Ms. Clifford also said she was threatened in 2011 by a man who told her not to bother Mr. Trump. She released a sketch of the alleged assailant Tuesday on ABC’s “The View.”
“He had his hands in his pocket, and he looked at my daughter,” Ms. Clifford said. “And I just remember him saying like, ’Oh, it’s a beautiful little girl, it’d be a shame if something happened to her mom. Forget about the story. Leave Mr. Trump alone.’”
In her lawsuit, Ms. Clifford also claims Mr. Cohen forced her to sign the NDA through “intimidation and coercive tactics.”
Ms. Katz said proving a contract was signed under duress “is a very high legal standard.”
“Essentially the courts look to if you’ve had threats, or literally a gun to your head, to sign an agreement like that,” she said. “The better argument, and the one they’re pursuing, is there is not a valid contract that was formed because President Trump, who claims to be the beneficiary of this agreement, did not sign the agreement himself.”
• Bradford Richardson can be reached at brichardson@washingtontimes.com.
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