General Motors Ethics Train Wreck

Here’s Something The News Media Hasn’t Explained Regarding The Weinstein Scandal: Those Victim Confidentiality Agreements Are Unethical, And Maybe Illegal

/ Jack Marshall / 5 Comments

Rose McGowan, the new Sexual Harassment Fury on social media, says she was raped by Weinstein and had to accept a $100,000 settlement with a confidentiality agreement as a condition of the deal. That means that if she subsequently told her story and accused Weinstein, she would be liable for damages, and would have to return the money. Right?

Not exactly. Most of the accounts in this sordid series of events make it seem like confidentiality agreements are iron clad and enforceable. Often they are neither. McGowan’s almost certainly wasn’t.

Debra Katz, an attorney specializing in sexual harassment law suits, recently explained that if employees or former employees came forward with information about Weinstein participating in criminal misconduct, their non-disclosure agreements or confidentiality agreements would probably be unenforceable, saying,

“These kind of very broad NDAs or confidentiality agreements typically violate public policy. Employees have to have the legal ability to discuss any concerns about unlawful behavior in the workplace … These broad provisions that would effectively silo people, make them feel like they can’t speak about this, are simply an instrument to put fear in people.”

My position has always been that lawyers who construct such agreements, knowing that they are unenforceable, are committing sanctionable ethical misconduct. The lawyer for the employee being silenced, moreover, has an obligation to let the client know that the requirement is unconscionable. Of course, it’s the client’s decision whether she wants to take the money.  It is also unethical to make an agreement you have no intention of honoring. Continue reading →

Passenger List On The Deadly General Motors Ethics Train Wreck

/ Jack Marshall / 20 Comments
"Oops! There goes G.M again!"

“Oops! There goes G.M again!”

That great, big, all-American motor car company that the Obama Administration took bows for saving five years ago has been revealed as a thoroughly corrupt, incompetent and deadly enterprise. As the full extent of the General Motors safety scandal unfolds—and it could get worse—this is a good time to take stock of the ethics lessons and miscreants involved, on the off chance that we are interested in learning something.

Did that sound bitter? It is. There is little in this terrible story of corporate ineptitude and corruption that wasn’t known and understood decades ago. Yet here we are again.

The manifest:

  • G.M. management. It pursued the policy of paying large settlements with confidentiality agreements to those injured by ignition switch defects in their cars, never fixing the defect itself. This is the old Pinto calculation, reasoning that if it is cheaper to pay for the deaths and injuries from a design defect than to fix the defect itself, then it makes good business sense to keep doing that, indefinitely. There are three problems with this logic, of course. First, it kills people. Second, it is stupid: eventually the facts will get out, and the whole company will be endangered. Third, it is wrong.
  • The plaintiffs’ attorneys. The trial lawyers association, way back when I worked for it two decades ago, adopted the unofficial position that the practice of accepting settlements from large corporations in product liability cases that included agreements not to reveal the damages and the defects involved to regulators, the news media, and endangered consumers was unethical. Members were urged to make a rejection of such terms a condition of agreeing to represent injured parties. Speeches were given, pledges were made. All agreed that the practice undermined the mission of the plaintiffs’ bar to make America safer through the civil justice system. What happened? Greed, that’s what. Just as every plaintiff has a price, so do many trial attorneys, who received up to 40% of those secret settlements. Every single one of the lawyers who guided their clients to accepting hush money in exchange for letting unsuspecting owners of G.M. cars risk their lives and those of their families were members of the American Association for Justice, which changed its name from the Association of Trial Lawyers of America because a survey showed the term “trial lawyers” was too negative. This is why the term is negative.

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