Making Abusive Contracts Great Again – Non-Disclosure Agreements, Which Have Bedeviled Employed Physicians, Go From Anechoic to Viral Courtesy Omarosa

Introduction: Confidentiality Clauses, Non-Disclosure Agreements, Non-Disparagement Clauses

In 2016, Dr Wally Smith and I published an article on how contracts employed physicians sign may threaten their patients and professionalism.(1)  At the time, we wrote,

clauses in the contracts that physicians sign with their employers or that their employers sign with third parties may be part of a growing class of subtle but protean and pernicious restrictions on employed physicians’ professionalism and autonomy.  These provisions may financially benefit employers and their management. No clear arguments that they benefit patients or support physicians’ professionalism have been made.

The first such provision we listed was the worst one, in our opinion.

The most pernicious threats created by employed physicians’ contracts may arise from blanket confidentiality clauses. For example, a hospital system subjected physicians to an ‘ironclad confidentiality clause’ under which ‘the doctors could not publicly discuss their situations or, for that matter, anything else of significance about the corporation’ that employed them….

These were particularly troubling because

Such clauses do not obviously benefit physicians or patients; instead, they may bury evidence of poor quality or safety problems, choke whistleblowers, or conceal mismanagement and malfeasance.

The clauses had a self-referential aspect

Because these clauses [themselves] are confidential, they have rarely been discussed in public, and corporate managers have never been called to justify their existence.

Finally,

Blanket confidentiality clauses could also hide other obnoxious contract provisions.

Up to 2016, obnoxious clauses in physicians contracts were, as noted above, quite anechoic, if not mostly totally secret.  I am afraid our article did not have many echoes.  But in our brave new political era, things have changed.

Donald Trump’s and Associates’ Use of Confidentiality Clauses, aka Non-Disclosure Agreements

By July, 2016, it became clear that the Trump campaign was requiring staffers to sign non-disclosure agreements similar to the blanket confidentiality clauses described above.  An Associated Press article stated that the campaign meant to enforce such agreements,

Republican presidential candidate Donald Trump is seeking $10 million in damages from former senior campaign consultant Sam Nunberg, alleging that Nunberg leaked confidential information to reporters in violation of a nondisclosure agreement.

Furthermore,

Trump requires nearly everyone in his campaign and businesses to sign legally binding nondisclosure agreements prohibiting them from releasing any confidential or disparaging information about the real estate mogul, his family or his companies. Trump has also said he would consider requiring such agreements in the White House.

That prediction proved to be correct.  In March, 2018, Washington Post editor Ruth Marcus started by quoting an interview Trump had given to Post reporter Robert Costa in 2016,

Costa: ‘One thing I always wondered, are you going to make employees of the federal government sign nondisclosure agreements?’

Trump: ‘I think they should. . . . And I don’t know, there could be some kind of a law that you can’t do this. But when people are chosen by a man to go into government at high levels and then they leave government and they write a book about a man and say a lot of things that were really guarded and personal, I don’t like that. I mean, I’ll be honest. And people would say, oh, that’s terrible, you’re taking away his right to free speech. Well, he’s going in.’

Reader, it happened. In the early months of the administration, at the behest of now-President Trump, who was furious over leaks from within the White House, senior White House staff members were asked to, and did, sign nondisclosure agreements vowing not to reveal confidential information and exposing them to damages for any violation. Some balked at first but, pressed by then-Chief of Staff Reince Priebus and the White House Counsel’s Office, ultimately complied, concluding that the agreements would likely not be enforceable in any event.

The nondisclosure agreements, said a person who signed the document, ‘were meant to be very similar to the ones that some of us signed during the campaign and during the transition. I remember the president saying, ‘Has everybody signed a confidentiality agreement like they did during the campaign or we had at Trump Tower?’ ’

Again, this implied that Trump and his business associates had long had a policy of requiring non-disclosure agreements (confidentiality clauses) of most if not all employees..

In addition, the agreements apparently were supposed to be valid in perpetuity.

Moreover, said the source, this confidentiality pledge would extend not only after an aide’s White House service but also beyond the Trump presidency. ‘It’s not meant to be constrained by the four years or eight years he’s president — or the four months or eight months somebody works there. It is meant to survive that.’

The provisions were extremely broad, blanket if you willl .

It would expose violators to penalties of $10 million, payable to the federal government, for each and any unauthorized revelation of ‘confidential’ information, defined as ‘all nonpublic information I learn of or gain access to in the course of my official duties in the service of the United States Government on White House staff,’ including ‘communications . . . with members of the press’ and ‘with employees of federal, state, and local governments.’ The $10 million figure, I suspect, was watered down in the final version, because the people to whom I have spoken do not remember that jaw-dropping sum.

It would prohibit revelation of this confidential information in any form — including, get this, ‘the publication of works of fiction that contain any mention of the operations of the White House, federal agencies, foreign governments, or other entities interacting with the United States Government that is based on confidential information.’

These agreements were apparently required even though they appeared to be blatantly unconstitutional.

Unlike employees of private enterprises such as the Trump Organization or Trump campaign, White House aides have First Amendment rights when it comes to their employer, the federal government. If you have a leaker on your staff, the cure is firing, not suing.

‘This is crazy,’ said attorney Debra Katz, who has represented numerous government whistleblowers and negotiated nondisclosure agreements. ‘The idea of having some kind of economic penalty is an outrageous effort to limit and chill speech. Once again, this president believes employees owe him a personal duty of loyalty, when their duty of loyalty is to the institution.’

A New York Times article again from March suggested that these agreements were required not just from White House staff, but from journalists who embarked on official administration trips.

Mr. Trump’s White House has also broken with convention in trying to impose written nondisclosure agreements in other instances. A small group of journalists scheduled to travel on a trip to Afghanistan with Vice President Mike Pence were instructed in December to sign a confidentiality agreement before they would be given the details of the trip, for security reasons.

The issue of blanket confidentiality agreements now being used in government despite Constitutional free speech guarantees caused a brief ripple in the force, but that soon faded away, until Omarosa, that is.

Omarosa’s Case Puts Non-Disclosure Agreements in the Headlines

This month it seemed impossible to avoid the saga of Omarosa Manigault Newman whose tell-all book about the president and his administration was just published to great tumult.  Ms Manigault Newman was the former reality television villain of Trump’s Apprentice program.  She became a campaign aide (and somewhat infamously warned us that all Trump’s critics would be forced to bow down to him, look here), then a White House aide with unclear duties, only to leave abruptly.  The story was everywhere in the media, and soon involved her allegations that she was pushed to accept “hush money” not to reveal goings on in the White House.  In fact, it became apparent that a blanket confidentiality agreement was one means Trump meant to use to keep her quiet.

On August 12, 2018, per Politico, KellyAnne Conway, erswhile WH drug czar (look here) said in an interview

It is typical, and you know it, to sign an NDA … in any place of work,’ Conway, counselor to the president, said to host Jonathan Karl on ABC’s ‘This Week.’ ‘I’d be shocked if you didn’t have one at ABC.’

‘I’m told she signed them when she was on ‘the Apprentice,’ certainly at the campaign. We’ve all signed them in the West Wing,’ she added. ‘And why wouldn’t we?’

Again, Ms Conway did not seem to recognize that there should be any differences in what goes on in the government and in a private business.  Furthermore, the implication was that non-disclosure agreements, or blanket confidentiality agreements, are now standard practice in private business, and are worthwhile and objectionable.  Of course, she did not give any reasoned justification for their use in business, much less any explanation how their use in the executive branch was not a blatant violation of the First Amendment.  But onward,…

Just to underline the similarity with practices were originally discussed in 2016, the White House agreements were required of everyone, and were self-referential in that they made their own existence secret.  On August 14, 2018, the Weekly Standard reported

President Trump’s escalating digs at ex-aide Omarosa Manigault Newman over her gossipy new tell-all have brought new scrutiny to this White House’s unconventional—and, arguably, unconstitutional—policy of requiring staffers to sign non-disclosure agreements to prevent them disparaging the president.

The rule extended not just to those public-facing West Wing regulars, like Apprentice star Manigault Newman or former press secretary Sean Spicer—but also to lower-level recruits less likely to shop a White House memoir.

‘We had to sign them when we went into the building,’ said one former White House and former Trump campaign staffer, who described the practice as just a part of this president’s modus operandi going back many years.

Furthermore, one staffer stated,

‘When we all got onboarded one of the things we had to do for our official ethics briefing was sign an NDA,’ the staffer said—but they could not keep a signed copy for themselves. ‘Everything got taken away as soon as we signed it.’

Just as in the case of the contracts handed to physicians, Trump’s White House confidentiality agreements made their own existence a secret.

Summary and Discussion

In 2016 we published an article decrying the requirement that employed physicians sign contracts containing confidentiality clauses as well as other obnoxious provisions in order to practice.  We asserted the confidentiality clauses, also known as non-disclosure agreements, did no good for physicians or their patients, but did allow the managers of the physicians’ corporate employers to hide embarassing information, poor quality care, and malfeasance.  At the time we urged physicians to carefully review their contracts and get legal advice before signing.  But we worried that little could be done to stop the use of exploitive contracts without wholesale changes in health care, which would probably require the organization of employed physicians.  Our concerns were inspired not a little by the lack of recognition of exploitive contracts as a problem.

Now the phrase “non-disclosure agreement” is frequently in the headlines.  The confidentiality clauses in contracts that Donald Trump has forced his private employees, then his campaign workers, and now White House staffers to sign are apparently very similar to those physicians had to sign.  They are extremely broad in what they make confidential.  They make their own existence, and other obnoxious contract provisions secret.

What is to be done?  Maybe the new publicity surrounding this problem will embolden physicians to address the issue in their own bailiwick.  Maybe it will suggest that blanket confidentiality clauses, and other obnoxious contracts provisions we had discussed should be rigorously regulated, if not outlawed by state and the US governments.  However, as long as we have the confidentiality clause imposer-in chief in charge of the US government little is likely to be done.

Reference

1. Poses RM, Smith WR. How Employed Physicians’ Contracts May Threaten Their Patients and
Professionalism.  Ann Int Med 2016; 165: 55-57.  Link here.

Reminder: Frontline trailer that includes Omarosa’s “bow down” warning

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