Weeks before the uproar over revelations that U.S. Rep. Elizabeth Esty paid her chief of staff a $5,000 severance package and signed a non-disclosure agreement concerning sexual harassment allegations made against him, the Connecticut state Senate raised Senate Bill 503, An Act Requiring Approval of State Agency Settlement and Nondisclosure Agreements.”  The bill, if approved by the General Assembly – would require legislative approval of certain payments made to state employees pursuant to a nondisclosure or separation agreement.

The bill provides in part that any state agency that is a party to a separation or nondisclosure agreement shall prepare a written summary of such agreement, with no personal or identifying information included in such summary and the name of the employee redacted. The summary, together with the amount of payment proposed to be made to the state employee pursuant to such agreement, shall be filed by the employing state agency with the clerks of the House of Representatives and the Senate within ten days after the date on which such agreement is reached. The request for approval of the payment and agreement shall be deemed approved if the General Assembly fails to vote to approve or reject such request within thirty days after such filing or submission.

The bill further provides that the General Assembly may approve any such payment and agreement as a whole by a majority vote of each house or may reject such payment and agreement as a whole by a two-thirds vote of either house if it determines that there are insufficient funds for full payment.

If rejected, the matter shall be returned to the parties for further negotiation.

Senate Republican President Pro Tempore Len Fasano-R and Representative Holly Cheeseman-R both submitted testimony in support of the bill.   Sen. Fasano expressed “grave concerns” about state agencies doling out sometimes six-figure payments to employees without the legally required oversight or authorization.  He cited recent examples, including over $376,000 in severance payments made to four senior level managers at Access Health CT who were secretly involuntarily terminated by CEO James Wadleigh between 2015 and 2017. Each of them received at least six months of salary and benefits pursuant to separation agreements that were not reviewed by any other state entity. Some of these agreements also reportedly included nondisclosure language, calling for employees to not disclose the terms of their settlement and to “not make any disparaging or defamatory statements” about Access Health CT.

Senator Fasano further indicated that state auditors reported this problem in their 2016 Annual Report, which referenced payments, some exceeding $100,000, made to state employees as part of non-disparagement and non-litigation agreements. According to the report, these agreements were neither reviewed nor approved by the state Attorney General or the Governor, as required by Connecticut General Statute Sec. 3-7 (c).  He also proposed modifications to the bill, including switching oversight from the General Assembly to the Office of the Attorney General.

In her testimony, Rep. Cheeseman also referenced the state auditor’s annual report which “revealed a need to stop offering six-figure separation and non-disparagement agreements to former employees without third-party oversight.” “The University of Connecticut, The UCONN Health Center, and The Connecticut Lottery Corporation have made numerous such payments and this is the second year in a row that the auditors have made such a recommendation in their annual report to the General assembly.”

The Joint Committee on Government Administration and Elections voted the bill out of Committee on March 23, 2018. It is headed to the Senate floor for action but has not yet been calendared.

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Photo of Patricia E. Reilly Patricia E. Reilly

Patricia E. Reilly, Chair of the Labor and Employment Practice Group, is an experienced litigator who represents clients in a wide range of cases including, employment discrimination and related torts, non-compete and restrictive covenants, wage and hour, breach of contract, unfair trade practices…

Patricia E. Reilly, Chair of the Labor and Employment Practice Group, is an experienced litigator who represents clients in a wide range of cases including, employment discrimination and related torts, non-compete and restrictive covenants, wage and hour, breach of contract, unfair trade practices, and business disputes. In addition to maintaining a thriving litigation practice, Tricia counsels clients on a variety of employment-related issues including hiring, firing, and discipline; wage and hour; state and federal FMLA; sexual harassment investigations and prevention; Title IX; pregnancy and disability accommodation; and avoidance of employment discrimination liability.

Tricia is listed as a leading Labor and Employment Lawyer in Chambers USA.  She is listed in Best Lawyers in America®, and in 2017, Best Lawyers in America® recognized her as “Lawyer of the Year”, New Haven, Litigation – Labor and Employment. Tricia is a member of the American Bar Association, the Connecticut Bar Association and the New Haven County Bar Association.  She received her B.A. from Wesleyan University and her J.D. from University of California, Berkeley School of Law.

Photo of Salvatore G. Gangemi Salvatore G. Gangemi

Salvatore G. Gangemi is a Partner in the Litigation Department of Murtha Cullina and a member of the Labor and Employment Practice Group. He advises clients with respect to state, federal and local employment laws. In addition, he litigates matters involving misappropriation of…

Salvatore G. Gangemi is a Partner in the Litigation Department of Murtha Cullina and a member of the Labor and Employment Practice Group. He advises clients with respect to state, federal and local employment laws. In addition, he litigates matters involving misappropriation of trade secrets, restrictive covenants, breach of employment contract, fiduciary duty, and other work-related common law claims. Sal also counsels clients on day-to-day issues involving workplace management and administration, including requests for reasonable accommodation for disabilities, for family and medical leave, and wage and hour issues.  He conducts employment law training on a variety of topics, including sexual harassment prevention and wage/ hour compliance.  He also drafts employment policies and agreements, and assists clients in auditing worker classification practices and policies both in the context of the Fair Labor Standards Act and state laws governing independent contractor determinations.