Shedding Light on Secret Settlements: An Empirical Study of California's STAND Act
Catalyzed by the #MeToo movement, states have adopted a spate of laws restricting secret settlements—controversial contracts that shield misconduct from public scrutiny. In 2018, California led the charge with the Stand Together Against Non-Disclosure (STAND) Act, which targets secrecy in the resolution of sex discrimination, harassment, and abuse cases. In the intervening years, more than a dozen states followed suit with restrictions of their own.
Reigniting a decades-old debate, transparency advocates hail these reforms as a major win for victims. They celebrate STAND and its legislative progeny as a way to promote accountability, facilitate accuracy in case adjudication, and publicize (and thus deter) abuse. Critics, meanwhile, warn that the reforms will hurt those they intend to help. By reducing defendants’ incentive to settle, confidentiality bans will undercut victims’ negotiating leverage, depress settlement sums, clog courts, and, perhaps worst of all, discourage victims from coming forward in the first place.
Nested within this debate sits a raft of confident, conflicting—and also eminently testable—claims about what exactly happens in the wake of reform. Will defendants still settle, even if secrecy isn’t on offer? How do anti-secrecy reforms actually alter the litigation landscape? Will case filings disappear? Or will they spike and drag on, as litigation turns scorched-earth? Debate over these questions has raged since the 1980s; the #MeToo movement only unleashed its modern incarnation. And, over these decades, the debate has always centered on fervent predictions regarding each. Yet no one has meaningfully tested them.
We do. Analyzing more than a quarter-million case filings from the Los Angeles County Superior Court and deploying a mix of quantitative and qualitative empirical methods, including advanced machine-learning techniques and in-depth interviews with two dozen practitioners, we explore litigation patterns before and after STAND took effect.
Our findings tell a clear and consequential story. Contrary to critics’ fears, the STAND Act did not yield a sharp increase or decrease in case filings. Nor did the Act appear to significantly prolong cases or amplify their intensity. The upshot: cases still settle even when secrecy isn’t on offer. Further, and though our evidence is more tentative, interviews with employment attorneys indicate that STAND does not even seem to have depressed settlement sums. Finally, and perhaps most importantly, it appears that positive effects did come to pass. Unlocking what we call a “liberation effect,” it appears that the STAND Act has improved the lives of many assault and harassment survivors, freeing them from the long shadow of an oppressive nondisclosure agreement. Taken together, these findings ought to reboot and recast the long-simmering debate about secret settlements, in California and beyond.