Insurance company confidentiality agreements devolve into one-way non-disparagement clauses, threatening free speech rights of the insured

Media Contact: Barbara M. Fornasiero, EAFocus Communications; barbara@eafocus.com; 248.260.8466

Royal Oak, Mich.—February 6, 2023— The trend toward mandatory confidentiality agreements in insurance settlements can increasingly be seen as an infringement on free speech rights, according to employee benefits and ERISA attorney John Joseph (J.J.) Conway of Michigan-based J.J. Conway Law. That’s due in part to what Conway views as ‘scope creep’, with confidentiality agreements now including far-reaching, one-way non-disparagement clauses.

“With the overwhelming majority of disputes settled by an agreement signed by both parties, settlement agreements have a unique place in litigation. Two decades ago, if a benefit plan wanted keep a settlement confidential, there would be a ‘cost’ to do so – and the only part of the agreement that was confidential was the dollar amount of the settlement,” Conway said. “In recent years, confidentiality clauses have extended from covering the settlement amount to preventing any further discussion of the case’s underlying facts. That’s now standard contract language. But the most troubling part of the confidentiality agreement evolution by insurers is the inclusion of the ‘un-bargained for’ non-disparagement clauses.”

Conway explains that previously, non-disparagement clauses were bargained for, with both sides agreeing to refrain from speaking ill of the other, and a so-called mutual non-disparagement clause was included in the settlement. Now, it’s more typical for the party paying a settlement amount to include a one-way non-disparagement clause, barring not only the release of the settlement amount but any discussion of the case’s underlying facts. The latest iteration of the non-disparagement clause prevents the settling party from ever criticizing the business practices of an insurance company or benefit plan – now and in the future. Conway, who frequently works with clients trying to get reimbursement for residential treatment services for their adolescent and teen children, says there’s a very targeted purpose for this move.

“These clauses are designed to thwart negative online reviews that can hinder new customer sales, but they also seek to prevent insureds from participating in online support groups for categories of denied claims, such as children’s mental health or substance abuse treatments,” Conway said. “Both of these categories, which should provide rightfully covered services, may require expensive residential treatment that insurers often fight tooth and nail against paying.”

Conway says the non-disparagement clause is preventing families from getting answers on how to obtain coverage for services that should be covered in their plans.

“A non-disparagement clause is qualitatively different than a confidentiality clause. The restriction of a person’s right to criticize an organization’s future business practices is a different category entirely from a settlement amount, and it’s a right we must closely protect,” Conway warned. “As families face increased barriers to coverage for teen mental health issues, they need more access to information from families who have been there – not less.”

About J.J. Conway Law

J.J. Conway Law was founded by John Joseph (J.J.) Conway in 1999 to work with individuals seeking full access to the employee benefits they have earned. The firm has been involved with nationally significant employee benefit, disability, and pension cases, including class action lawsuits for such landmark decisions as requiring Michigan private insurers to cover autism health treatments for children through age 18 and protecting the pension rights of the City of Detroit employees, police and firefighters as well as Wayne County employees by holding their trustees accountable for investment decisions. The firm’s motto is “Conquer Tomorrow®” and is dedicated to making tomorrow easier for their clients across the United States.  Learn more on the firm’s website.