Jaffe anticipated that the session with the mediator would
be a waste of expensive time because little new would be presented. Emotions would rise; as the only one with
skin in the game, I was a risk, especially because I thought that the unclean
hands critique of the emails was nonsense.
From Jaffe’s standpoint, it would be safer to negotiate separately with
Layton.
On Wednesday morning after the briefs were submitted, Jaffe
offered $75,000, and Layton countered with $24,000, which was $1,000 less than
the low end of the bracket Jaffe had proposed.
I gave him permission to counter with $55,000. While he was working with Layton, I
researched the “unclean hands” defense.
I wrote Bifoss that she had misread the law and my situation; she
replied, “It is illegal for you to access someone else’s computer files without
their knowledge,” referring to the federal Computer Fraud and Abuse Act and the
California Computer Crimes Act. That
afternoon, Jaffe informed me that he had settled for $45,000, and two hours
later he received a draft settlement agreement from Layton. Although he had agreed for less than I
authorized, I thought maybe it could still work out if the other terms of the
settlement agreement were reasonable. If
they simply read, “here is the money, now go away,” maybe I could live with
that.
On Thursday with more internet research under my belt, I
told Jaffe and Bifoss that their understanding of the “unclean hands” was
incorrect because my roles of CFO and Compliance Officer legally justified my
viewing company emails based on my suspicion of wrongdoing. Given the clear proof of retaliation that the
emails provided, we should demand $65,000.
Jaffe said that he stood by Bifoss’ understanding of the law and,
anyway, the $45,000 constituted an “enforceable bilateral agreement,” meaning I
had to shut up and accept the deal whether I liked it or not. That evening, Jaffe sent me a copy of the agreement
he had negotiated with Layton.
The document provided that HomeFirst would pay me $45,000 in
settlement of all claims I might have against them, and I would not disclose at
any time after my employment anything of a secret, confidential, or private
nature connected with the business of HomeFirst, make any disparaging comments
about HomeFirst, its officers, directors or employees[1],
encourage anyone else to make disparaging comments, or disclose the nature or
existence of the settlement agreement.
Since I would receive $27,000 after Jaffe’s fees and I had
to pay $3,000 to the mediator even though no meeting had occurred, the
agreement meant that I would net about two months’ compensation. That was far from the $100,000 that I had
fantasized in March, and the gag order was a nightmare.
I had begrudgingly accepted that a settlement would require
that I not disclose the terms of the agreement, but I had not considered that I
would never to be able to talk about any of my experience at HomeFirst ever, to
anyone. For two years I had been told to
shut up. I successfully resisted that
pressure. I could not stomach agreeing
now to be silent forever.
The non-disclosure provisions that are increasingly common
in employment and separation agreements, aim to squelch whistleblowing with
language like, “Employee shall not disclose, and represents that Employee has
not disclosed, any confidential company information to any third party”[2]. Some agreements require employees to report
violations internally first as the Chair had ordered me, to forego monetary
rewards like those from qui tam suits, and to maintain silence on the terms of
severance agreements.
My employment by HomeFirst had not bound me in a
confidentiality agreement, but now they wanted even broader protection that
extended to any information of a private nature, whatever that was, and to
comments that they might consider disparaging.
They treated it as a simple business transaction, and they offered an
insultingly small payment, but I wanted them to feel a penalty for having done
wrong.
Although I was principled, I still had doubts. Since Jaffe’s $5,000 and the mediator’s
$3,000 were sunk costs, I was thinking about walking away from $32,000, and for
what? Was I so naïve as to expect not to
be restricted in what I could say?
Really, who was I going to talk to about HomeFirst anyway? And if I did tell anyone, how would they find
out? Would they require annual
depositions to see if I had talked? Take
the money and do what you want, some suggested or, at least, wondered.
On Friday, I told Jaffe and Layton that I would not sign the
agreement as written. They may have been
negotiating but not on terms acceptable to me.
Copying Layton earned me a wrist slap from Bifoss and a warning that I
had risked a waiver of attorney-client privilege by doing so. I was so done.
On Sunday evening, I sent Jaffe an amended settlement
agreement without the onerous restrictions on my future communications. Jaffe replied, HomeFirst would not agree to
changes in the nondisclosure language.
Batting emails back and forth, I said that I had told him months earlier
about having the CEO’s emails without getting a rise from him and I had set
$90,000 as a minimum goal in negotiations.
I posed a hypothetical case to clarify the email question: a CFO gathers
email proof that his CEO is stealing and provides it to the police; he is
fired; are you telling me that his retention of the emails was illegal? Jaffe never replied. He was so done, too.
I called Bifoss on Monday.
When I complained about the “unclean hands” issue, she assured me that
they were my attorneys and understood such things; not very good attorneys, I
said, if they make a mistake like that.
She assured me that the $45,000 was a good result and I would not do
better in court. The restrictions on
communications were entirely normal, she said, and not the result of Jaffe’s
letting Layton write the settlement agreement.
The same terms were included in every settlement agreement Jaffe
negotiated, she promised. I lamented
that I had not learned much earlier, say on June 4, that they would consider
two months compensation plus a gag order to be a good result.
My ace negotiator had let me down.
[1] To
avoid the legal challenge of determining damages from disparagement, the
agreement called for the return of the settlement amount in the event of
disparagement. To ensure the
enforceability of the clause, which it described as “material,” it called for
me to acknowledge that it was “reasonable”.
[2] Moberly,
Richard, Jordan A. Thomas and Jason Zuckerman.
“De Facto Gag Clauses: The Legality of Employment Agreements That
Undermine Dodd-Frank’s Whistleblower Provisions.” ABA Journal of Labor & Employment Law 30
(2014) 87-120
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