A new law that went into effect in Vermont this month sheds light on a little-known legal practice in private sexual harassment settlements that some say punishes the victim.
Known as a “do not darken my door” or a “no rehire” clause, it bars employees who settle discrimination cases from ever working for their employer again–and this month, Vermont became the first state to ban it.
Vermont is the latest of many states to pass new sexual harassment laws since the #MeToo movement gained national recognition last fall, but its bill is the first to address this specific legal provision. Lawyers told the NewsHour Weekend that this is considered a widespread practice, but it’s hard to know exactly how widespread, because most sexual harassment cases are settled privately and bound by non-disclosure agreements.
Critics say this kind of clause hurts the victim and disincentivizes people from coming forward when they experience harassment or discrimination.
Lisa Senecal of Stowe, Vermont, noticed a “no rehire” clause when reading a draft of her settlement agreement with Inntopia, a Vermont-based software company, after she says she was sexually harassed by their then-president during the job interview process. The language stopped her in her tracks.
“I was absolutely appalled that there was a provision that appeared to be retaliatory and punitive against the victim,” Senecal told the NewsHour Weekend. “And that the victim would be banned from the company, not the harasser. I couldn’t believe it.”
Senecal brought the clause up first to her lawyer, then to Inntopia. She said she was told that the “no rehire” clause was a standard part of cases like hers.
“The company’s attitude was, ‘Well, yeah, this is something that’s part of the agreement and shouldn’t be questioned, of course it’s in there,’” Senecal said. Inntopia had no comment on Seneca’s description of events.
The practice has been a “boilerplate” part of separation agreements between employees and employers for years, said Susan Gross Sholinsky, an employment and labor lawyer at Epstein Becker & Green in New York City. She said the clause is meant to protect the company from being sued again in the future.
“No-rehire clause or not, I don’t know a company that would go out and rehire an employee that they just settled a case with — it doesn’t make sense for them,” Sholinsky said.
However, in recent years, some employment lawyers along with the Equal Employment Opportunity Commission have started to rethink the practice, because it can be seen as retaliatory in discrimination cases. In 2016, the commission issued new guidelines warning companies against practices that could be seen as retaliating against employees who file discrimination claims, which could include “no rehire” clauses in some cases. The commission also does not include the clause in the example separation agreement they provide.
The “no rehire” clause is “seen as unreasonable retaliation against the person, and it unreasonably impacts their ability to be employed,” said Cary Brown, executive director of the Vermont Women’s Commission.
Addressing this clause could make a difference in Vermont, a small state with a limited number of employers, where being banned from one company can significantly affect a person’s options, Brown said.
If a company is owned by, or owns, other companies, a “no rehire” clause could bar someone from applying to work there, too.
“It’s basically saying, ‘See you later, you can never work for me or any of my affiliates again,’” said Vermont state Rep. Sarah Copeland-Hanzas, the main author of the bill, which had tripartisan support. “So if you’re in a specialty field in a small state, that might mean you can never work again.”
“No rehire” clauses are particularly restrictive for people in specialized fields, such as hospital workers, said Senecal. Hospitals are often part of a much larger network, one that a worker could be banned from by a “no rehire” clause.
Employees who don’t have the resources for an attorney may not even realize the “no rehire” clause exists, said Maya Raghu, Director of Workplace Equality and Senior Counsel at the National Women’s Law Center.
“They may be giving away their rights without even realizing it,” she said.
Unable to remove the clause, Senecal eventually reached a compromise with Inntopia. She asked the company to include a “no rehire” provision for DeLuca, too, which they did.
The Vermont bill is a leader in several other ways, Raghu said. The law extends sexual harassment protections to all workers, even those not covered under Title VII, like freelancers, interns and volunteers. It also requires all settlements to state that settling privately doesn’t bar the person from testifying in court, nor from pursuing criminal charges against their alleged harasser. The bill doesn’t ban non-disclosure agreements, but it does prohibit including language in employment contracts that could prevent a victim of sexual harassment from coming forward.
“This bill will be a game-changer to get employers to do more than just ‘cover-their-ass’ policies, and will help create a culture in which sexual harassment is no longer condoned [and] swept aside,” Copeland-Hanzas said.