The Trouble With Seals.

A confidentiality agreement can seem like a good way to resolve a legal dispute–when you are not in public like.  Ned Lamont’s finding that out again this week.  He was sued in 2002 by a former employee, who claimed Lamont’s company had discriminated against him on the basis of race.  The employee, Ronald Keene, a former vice president at Lamont’s cable company, is black.

Lamont tried to have the case dismissed at the outset and failed.  Keene claimed he was “denied stock, bonuses and commissions from sales activity,” according to The Hartford Courant story by Jon Lender.  Keene sued for more than $1 million.  The case was resolved as it moved closer to trial, not unusual in any litigation.  The problem for Lamont is that the ugly accusation ended with a confidentiality agreement, according to the Lamont campaign, barring each party, it seems, from talking about the result.  This puts Lamont in a bind.  If it was a frivolous action and he resolved it for a token amount, he can’t say that.  Though if that were the case, it makes the confidentiality agreement an odd feature.

If Lamont settled the case for a hefty payment–or what would seem like one to the man on the street–then it’s in the Greenwich cable executive’s interest for the result to remain a secret.  The public, however, would be curious to know.

Mr. Keene could agree to amend the confidentiality agreement, though some payment might need to be tendered for that.  On the other hand, it’s possible that Lamont would prefer the resolution of the case to remain sealed.

I have some experience with Lamont and sealed agreements.  In the heat of his 2006 Senate race against Joseph Lieberman, I wrote a column about a class action insider trading claim brought in Florida against Annie Lamont, Ned’s very successful venture capitalist wife. After much litigation, that case was resolved under an agreement sealed by the federal court in Miami.  A lot of documents were available but not the one that mattered most.  The Lamont campaign, which had been accommodating and pleasant, became surly and obstreperous.

Lamont’s Senate campaign hinted at what was in the settlement agreement, but couldn’t reveal it because that would have violated a federal court order.  The Lamont campaign also suggested that it was going to seek an order unsealing the settlement agreement.  It never offered any proof that it carried through on that.

The language of business litigation involving accusations of insider trading and preferences is highly flammable.  “Fraud” is tossed about by plaintiffs and it gets a reaction.  When it is not refuted in an open resolution of a claim, it leaves itself open to many interpretations and denies the parties the ability to explain or defend.  Opportunities to spin, which is what campaigns do with other issues, are reduced because they either don’t have facts or aren’t allowed to share them.  Instead, they flail, which is what Lamont’s campaign did four years ago and is repeating today. That’s never a winning strategy.

If Ned Lamont paid to settle a racial discrimination claim against his company, the public will want to know.  It’s not a lot to ask of a candidate seeking to become governor based on his experience as a businessman.