Nondisclosure Agreements and Herman Cain
posted by Dave Hoffman
Let’s pretend for a moment that Herman Cain had a legitimate chance of becoming the Republican nominee for President. Now imagine that he actually engaged in unlawful behavior toward at least one female employee of the National Restaurant Association. That employee would like to talk about what happened, but she is worried that she’ll breach a 1998 severance and nondisclosure agreement if she talks to the press.
Now, let our imagination run wild. The accuser – angered by Cain’s denials of bad conduct- decides to throw caution to the wind and go public. Her allegations are salacious & they portray Cain in the worst possible light. Notwithstanding her claims, Herman Cain actually gets a bump in the polling and becomes the nominee. During the general election campaign, other women come forward – sparked by the original accuser’s courage. Nevertheless, given the dominance of deterministic macro-economic factors over political strategy and common sense, Cain wins a tight election to become the next President of the United States. At that point, emboldened, he decides to sue the woman who released the information about him for breach of contract, on a theory that he was a third-party beneficiary of the nondisclosure agreement. (Let’s pretend that this is a doctrinal possibility.)
Last year, in a discussion with Larry Cunningham and Dan Solove, I argued that it’s exceedingly unlikely that any state court in the Union would award damages for breach of a nondisclosure agreement under circumstances like these, where (i) the information to be protected relates to sexual misconduct; (ii) the information is of immense value to the public at large; and (iii) it’s basically impossible for the promisee to prove damages with any certainty. I am still convinced this is true, and that the media too uncritically reports that parties are “bound” by NDAs that would have almost no effect if tested in Court.
This line of thinking makes me doubt that fear of a breach of contract lawsuit is playing any role at all in the refusal of Cain’s accuser to come forward. Rather, as her lawyer said today, she is afraid of the reputational damage that disclosure would bring, even if she’s entirely in the right.