Did Cain Trip The Wire? Attorney Suggests Breach of Confidentiality Agreement

There is an interesting legal question at the heart of the still unfolding scandal over whether Republican Presidential contender Herman Cain engaged in sexual harassment. Women accusing Cain were reportedly given a settlement with a gag provision — a common element to such settlements.

Herman Cain has spoken about the allegations, including quoting from his account and suggesting that he merely mentioned that a woman was the same height as his wife. He then suggested that they were hiding behind anonymity — even though their agreement gagged them.

A typical such provisions states: “The terms and conditions of this Agreement are absolutely confidential between the parties and shall not be disclosed to anyone else, except as shall be necessary to effectuate its terms. Any disclosure in violation of this section shall be deemed a material breach of this Agreement.”

Now, their attorney Joel Bennett has said that the Cain interviews with Fox New may have violated the same provision — and thus invalidated the gag on the women. The whole idea of these provisions to prevent either party from “taking a victory lap” or denouncing the other party. They are only enforceable to the extent that your client honors the gag. When confronted with a public allegation, you have to counsel your client on the costs of going public — the chance that the other party will then be free to add details and respond in kind. Such agreements often have not just a confidentiality agreement but a non-disparagement provision.

He certainly appears to have tripped the wire with statements like:

–“I’ve never sexually harassed anyone and I was falsely accused while I was at the National Restaurant Association.”

–“She was in my office one day, and I made a gesture saying – and I was standing close to her – and I made a gesture saying you are the same height as my wife. And I brought my hand up to my chin saying: “My wife comes up to my chin.”

–describing the women as bringing “false accusations.”

Of course, this comes down to the language of the provision. In cases like Hopgood v. Merrill Lynch, 839 F. Supp. 98 (P.R. 1993), the court rejected such a claim because the provision only refers to the “terms” of the settlement and not discussing other aspects.

When a case is settled in litigation, these confidentiality agreement are often incorporated in courts orders, allowing for the court to hold parties or lawyers in contempt for any breach. Baella-Silva v. Hulsey, 454 F.3d 5 (1st Cir. 2006). Thus the typical remedy is found in a breach of contract action as opposed to self-help through counter statements. In agreement like the one in Baella, the provision contains the remedy. In that case, the agreement stated “[c]onfidentiality is the substantial consideration for th[e] compromise” and provides that “[a]ny violation of confidentiality . . . will result in liquidated damages of Fifty Thousand Dollars ($ 50,000.00) to be assessed by this Honorable Court after notice and hearing.”

Absent such a provision or incorporating court order, an aggrieved party will often feel free to public defend themselves in the knowledge that the other party can no longer prevail in a breach claim given their own violations. Even then however it is often important to keep the defense within the scope of the original violation. If you opportunistically go beyond the original violation, you could still find yourself subject to an action for breach.

This issue comes up often with attorneys who are criticized by clients and are able to defend themselves outside the normal limitations of confidentiality for attorney-client relations.

Likewise, employment agreements often include non-disparagement clauses like the one below:

Executive agrees that, during the term of employment and for one year thereafter, executive shall not, in any communications with the press or other media or any customer, client or supplier of company, or any of company affiliates, criticize, ridicule or make any statement which disparages or is derogatory of company or its affiliates or any of their respective directors or senior officers. No directory senior officer of company will, during the same time period, criticize, ridicule or make any statement which disparages or is derogatory of executive.

Here Cain has clearly attacked the veracity of the women and made very concrete (and what the attorney says are misleading) descriptions of the allegations. Of course, there remains the question of who leaked the settlement. That can be a fact that would be the basis for discovery if either party were to sue under the contract.

For their part, the women (or Cain) could also threaten a defamation action. Cain’s statements are not made in filing or in court and are thus not privileged. Conversely, the statements of the lawyer or his clients have been made publicly. It is possible that any party could claim that this ultimately comes down to a difference in opinion as to what constitutes sexual harassment. However, Cain is saying that the statements are are false and made behind the veil of anonymity — suggesting some other than a difference in perspective.

There is also the question of whether Cain should, as a candidate for the highest office, formally waive any confidentiality and allow the women to speak without threat of legal action. After all, he has basically called them either liars or opportunists or both. He has the ability to ungag the women and they can in turn agree that he is not bound by confidentiality in responding.

Source: The Hill

52 thoughts on “Did Cain Trip The Wire? Attorney Suggests Breach of Confidentiality Agreement

  1. ” Of course, there remains the question of who leaked the settlement.”

    That’s the $64.000 question,and the right is trying to say it was the Democrats who IMHO don’t have a dog in this fight at this time,and the “LIBERAL MEDIA”.

    I think before tonights evening news,Mr. Cain will be in a very uncomfortable place,that he won’t be able to laugh off.

  2. This is all good. It’s time to get it out of the way before he gets any deeper in the cycle. Polls suggest at the moment and fundraising that so far it’s not a problem. Remember it’s best to get the stuff out of the closest as soon as you can. He may have waited to long.

    This brings all of the attention to Cain and if he handles it correctly and gets it all out of the way now he could come out smelling like a rose. Remember our dear president said ne smoked weed and snorted coke and he still got elected. Clinton said he didn’t inhale and was actually having sex with women, well, that depends on what your definition of is, is.

  3. ” Of course, there remains the question of who leaked the settlement.”

    Exactly Eniobob. The Cain campaign may be behind all of it to get it out of the way. Better to try and clear the air and your dirty laundry now then say in the middle of a one on one debate with your opponent. He knew this was in the closest.

  4. Wouldn’t the state law specified in the contract for the venue of any future litigation for breach, subsequent to the contract being finalized, have to be considered?

    State law can vary on these types of contract terms.

  5. Iowa yawns at Herman Cain allegations

    MARSHALLTOWN, Iowa — While Herman Cain struggled for a second day in Washington to push back against sexual harassment allegations, the high political drama almost went unmentioned Tuesday in one of the most important courts of public opinion — Iowa.

    On the campaign trail, on local conservative talk radio and in conversations among activists, Republicans here have so far greeted the story with a shrug.

    The reactions from Cain’s GOP rivals have been muted: His fellow 2012 candidates continue to tread lightly around the report that the likable front-runner reached settlements with two female employees while he was CEO of the National Restaurant Association in the 1990s.

    Read more: http://www.politico.com/news/stories/1111/67410.html#ixzz1cYctyCiu

  6. I’m guessing that he made mention of a physical characteristic of the woman/women that is similar to his wife, that has little do to with altitude.
    One descriptive word could be “appurtenances.”
    Either way, he’s toast.

  7. According to our pizza guru, it was a pittance of a settlement (“couple of months salary”) so what’s the harm in violating it from the purported victim’s standpoint. Pay the money back; contact a publisher; hit the Fox-msnbc-CNN circuit and let the fur fly. The First Amendment is a wonderful thing, and who needs all that secrecy in the first place. I’m willling to bet ol’ Herman Cain would renegotiate that settlement if he thought it would harm his own future book deal and that rags-to-riches story he’s peddling.* After all, that’s why he’s running in the first place, isn’t it?

    *If his story is true, its his parents who deserve the nomination.

  8. http://www.huffingtonpost.com/2011/11/01/herman-cain-accuser-severance_n_1070698.html?icid=maing-grid7%7Cmain5%7Cdl6%7Csec1_lnk2%7C109342

    “The severance payment development comes on the heels of a Washington Post report from earlier Tuesday explaining that a second Cain accuser wants to speak out about an alleged incident involving Cain. The woman is reportedly barred from discussing the encounter due to a nondisclosure agreement that she signed with the National Restaurant Association.”

    Bring it on.

  9. Who leaked? the story emerged from Politico, whose print advertiser base is lobbyists. they wouldn’t ordinarily draw attention to that community. their commentary tends to be center-Right/GOP establishment and their biggest fan in Bush years was none other than Karl Rove. Given Rove’s long history of dirty tricks, he most likely was the source.

  10. Could someone please explain to me how these GAG clauses provide a benefit to society?

    What justifies our obligation to provide courts and law enforcement to uphold these contracts? They frequently deprive our society of dearly needed information about people who have done things which resulted in serious harm to others. For instance, the doctor that routinely commits malpractice uses gag clauses to deprive all of his other patients from discovering (until it’s too late) that their doctor is incompetent. The free-market only works when everyone has a wealth of information to base their decisions upon.

    Shouldn’t the courts recognize when a gag order is counter to the interest of society before enforcing it?

  11. Digital Dave:

    “Could someone please explain to me how these GAG clauses provide a benefit to society?”


    They don’t. They merely foster settlement because the defendant can hide his/her/its misdeeds under the confidentiality agreement. However, they sometimes serve the interests of the Plaintiff by avoiding publicity and the inevitable pleas for financial help from family and charities that a large settlement necessaritly engenders. They are not going away anytime soon.

  12. “Could someone please explain to me how these GAG clauses provide a benefit to society?”

    It’s part of a bigger picture — how do civil lawsuits provide a benefit to society? At base, it provides an alternative to the hue and cry, providing an alternative to folks grabbing some of that police power which they transferred to the state — the Hatfield and McCoy thing (y’all know that started over a pig?).

    Litigation is about substantial justice — just enough to keep the peace. As a law prof. once rebuked a student, “If you want fair, go cry to your Momma.”

    And if litigants can settle on their own terms, that’s even better. For every one of these agreements which settled a lawsuit, there are hundreds if not thousands of the same without suit ever being filed.

  13. Wow, eniobob. The case against letting this man anywhere near the Office of President continues to grow. If he’s so comfortable with the idea of a shooting war with Iran then he should be willing to lead from the front.

  14. Herman Cain Tells Bill O’Reilly He Is Comfortable With A ‘Shooting War’ Against Iran

    Israel test-fired a missile from a military base on Wednesday, two days after Prime Minister Benjamin Netanyahu warned of the “direct and heavy threat” posed by Iran’s nuclear program.


    Israel Considers Pre-Emptive Attack On Iran


  15. Iran would cause serious damage to the United States and Israel should Jewish state strike the Islamic Republic’s nuclear program, Iran’s top military official said on Wednesday.

    The “Zionist regime’s military attack against Iran would lead to heavy damages to the US as well as [to the] Zionist regime,” Iran’s Chief of Staff Maj.-Gen. Hassan Fayrouz Abadi said.

    Iran would attack Israel in a “surprising” way, he was quoted by Army Radio as saying.


  16. Well, of course you would have to read the whole out of court settlement agreement and examine applicable state law, but it looks to me like she could argue that he breached the bilateral contract by not upholding his end of the bargain.

    I am very familiar with these types of draconian and totally onesided agreements employers make employees sign to get a month’s pay as they are escorted out the door, often with an armed security guard on each side. Can you say adhesion contract?

    The employee is only allowed to retrieve her purse (if a woman) and is not allowed to retrieve personal possessions until the settement agreement is signed. This gives the employer ample time to either plant stuff in the office just in case the settlement agt. is somehow set aside. I don’t know whether these types of agreements are binding on the EEOC.

  17. “Israel Considers Pre-Emptive Attack On Iran”

    She did the same to Syria — despite some modest Arab howling, nothing came of it (except Arab relief probably).

    “Iran would attack Israel in a “surprising” way, he was quoted by Army Radio as saying.”

    Sounds like Baghdad Bob

  18. I personally could care less about this allegation against Cain. Based on his purely political statements i think him unfit for the Presidency. However, the two aspects of this issue that interest me are the ethics of non-disclosure agreements and whether or not Cain nullified this one by speaking out. I agree with the sentiments expressed by DigitalDave, Mespo, Oro Lee and Amity that these agreements should be against public policy and therefore legal enforcement. They are often the result of the parties to the settlement (contract) being unequal in economic stature. I was laid off at a non-profit for purely financial reasons, they gave my deputy my job, at a considerable salary savings and was forced to sign an agreement in return for two months severance. I was being laid off anyway so they held the cards so to speak.

    From what I remember of my Contracts classes, unequal status of the contracting parties can be a factor in the enforcement of a given contractual agreement. We have seen many instances in the past years of these contractual agreements being used to cover up some sort of malfeasance.

    As to whether or not Cain violated the agreement by in essence giving “his side”, I think it is apparent he did. While I have little use for the man, I do feel a modicum of sympathy. By the existence of the settlement’s public notoriety he was put in a difficult position being a candidate and literally had to speak out. I don’t think the leak was the doing of the DNC because they had little to gain. Cain will not be the Republican Candidate, nor would he win if he ran. I think Rich’s looking towards Rove is the far better explanation.

  19. Breaking news on Cain. Things are becoming ominous:


    Still isn’t it a shame that rather than discuss substance, this tabloid crap is what drives mainstream media reporting. This is why OWS is significant, it forces the media to deal with the real issues. Unfortunately, even there they are incapable of dealing with it responsibly simply because their well-paying jobs are at stake. With our MSM, it’s like the old joke about prostitution which ends with: I know what you are, but what’s your price?

  20. Sarah Palin must be on speed dial some where trying to some how get a word in on this matter,but no fear ex governor Mark Sanford should be giving his words of wisdom on faux soon enough,I wonder what people from other countries think about whats going on in our politics.

    Senators Dirksen,Brooke,Baker,to name a few Republicans and looking at the field who are there now,just thinking of these former Senators glad they were there at the right time for if the current crop were there then we all may be living in caves.

  21. not much chance democrats are behind this, makes no sense, same with any of the other candidates campaigns.

    Democrats would wait until just before the general election to leak something like this, it would be pointless to leak this on a candidate this far from the general alection, especially one that any serious polito-philes(is that even a word?) doubts will still be around come Nov of next year.

    Any of the other Republican candidates would also wait until just before the primaries as it is this will be forgotten by the time the primary season starts in earnest.

    Rove or even the GOP establishment is certainly possible. Unless something completely unexpected happens we’re looking at an Obama-Romney match up, politically it would make sense to attempt to get most Republicans behind Romney(the guy with the best chance to unseat Obama, as of now anyway) ASAP avoiding a long and messy primary season.

    Or, the Cain campaign leaked this on their own. this seems lost likely to me.

    1) the story will come out eventually, get it out now, in two months it will be forgotten,

    2) play the victim card and claim the “liberal media” is out to get him because he’s black and conservative, endearing him to the Republican base and opening up lots of post campaign opportunities for book deals, higher speaking fees and a job as a political commentator, similar to waht Palin did, although Cain is more affable than Palin, I think he know he knows he’s not going to be President

    most polito-philes(it’s a word now) think Cain is running for Best Seller on the New York Times book list rather than President(little or no infrastructure in key primary states)

    3) a shiny thing for the media so they won’t report on this

    the Other Cain Scandal

  22. Herman Cain Sexual Harassment Allegations: Confidentiality Agreements Scrutinized As Cain Faces Press (VIDEO)

    “Republican presidential candidate Herman Cain’s staff called off a press conference in Alexandria, Va. Wednesday morning as he faces sexual harassment allegations. “Excuse me!” he reportedly said, quite loudly, when asked about the controversy. He later said to reporters, “Don’t even bother asking me all these questions you’re curious about.” At least one photographer took a “hard blow to the face” as Cain personnel and hotel security pushed back against assembled photographers, according to the New York Times.”


    Imploding in front of everyone.

    “Defend ourselves and defend our enemy”from his interview with Oreilly.
    JUst heard an interesting question,”is it hip to be dumb ?”

  23. “Iowa yawns at Herman Cain allegations… ” I think Gaddafi could be running for President on the Republican ticket and a lot of these folks would vote for him….

  24. Herman Cain is a stain on the Republican party, if that is possible to stain any worse.

    Yeah, but least he’s not a stain on a dress. They say that shits hard to get out da material. It never really comes out, making it a stain for life.

  25. “Herman Cain is a stain on the Republican party, if that is possible to stain any worse”

    I think you underestimate Republican politicians.. Remember Michael Steele – – – he keeps Herman from looking crazy. Now Herman just looks uniformed — but he’s boning up on things..

  26. “Remember Michael Steele – – – he keeps Herman from looking crazy.”

    But Michael’s singing range includes “Hip Hop Republican.”

  27. Cain’s supporters all watch Fox News, which treat him as the victim of a liberal smear campaign. So somehow I don’t think his popularity will suffer much.

    My view is that the majority of politicians on both sides of the political divide are probably guilty of “indiscretions”. What mazes me is that people still think it is so scandalous when it comes to light.

    “What? A powerful man made inappropriate overtures to underlings? But that never happens!”

  28. Caught a video of an outraged Donald Trump demanding that John Stewart should apologize for his bit regarding the sexual harassment claims against Herman Cain. Trump called Stewart a racist and said also that he should be fired. I saw the bit, it was pretty mild. Trump though was spectacularly over-reacting. I’m going to watch the Daily Show though in hopes that Trump’s rant will provide Stewart with another musical opportunity: one of his famous “Go F*** Yourself” moments.

    The fact that Cain doesn’t know that China has nuclear weapons is more troubling than that he makes passes at underlings.

  29. Mespo, thanks for the video. “V”, “From Hell” and “Watchmen” are my favorite graphic novels. Allan Moore’s work just gets better and better with age.

  30. The key question in my mind is why would any person, with such alleged “time bombs” in his background, run for the highest political office in the land?

  31. Mfitch,
    I’m shocked that you would imply that many politicians engage in sexual dalliance. I though that most were awash in family values.

  32. “The key question in my mind is why would any person, with such alleged “time bombs” in his background, run for the highest political office in the land?”

    Politicians know that USA means United States of Amnesia.

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