TOO MUCH SUN CAN BURN: REASSESSING PUBLIC ACCESS TO CONFIDENTIAL EMPLOYMENT SETTLEMENT AGREEMENTS IN PUBLIC EDUCATION.

• Author: Paige, Mark A.

INTRODUCTION

In 2018, a New York school district reached a confidential settlement to resolve an employment discrimination claim brought by a school administrator. (1) Under the terms of agreement, the school district provided the administrator $380,000, health care coverage for two years, and a "neutral letter of recommendation." (2) Both parties were prohibited from discussing the underlying dispute because of a confidentiality clause in the agreement. (3) Such confidential settlements allow employers and employees to avoid expensive and risky trials and conserve resources, (4) making them sound public policy. (5) For public school districts, resource conservation benefits are important, especially in light of the chronic underfunding of public education. (6)

Despite confidentiality clauses, many agreements become public knowledge. (7) In the New York situation, cited above, the settlement ultimately entered the public discourse because a newspaper requested its release under New York's Freedom of Information Law, the state's open government law. (8) New York's law is not unique; all fifty states have similar statutes that create a public right of access to government documents. (9) Legislatures enacted these laws to promote government transparency as a matter of policy. (10) This policy objective has been interpreted to require public inspection of confidential settlement agreements, thereby effectively destroying any confidentiality guarantees between the parties to keep the cause of the settlement out of public view. (11)

But the assumptions behind state open records laws are dubious. (12) At a minimum, they are a "simplistic model of linear communication" resting on the unproven assumption that public access to information improves public oversight and, in turn, our representative democracy. (13) More troubling is that the unintended costs of these laws are overlooked. Justice Antonin Scalia characterized such laws as the "Taj Mahal of the Doctrine of Unintended Consequences, the Sistine Chapel of [c]ost-[b]enefit... ignored." (14) Thus, attention to the costs and benefits of open records laws vis-a-vis other competing policy interests, such as the use of settlement agreements to conserve public resources, is needed. (15) This paper begins that analysis in the context of employment settlement agreements made by public school districts.

This article contends that the current legislative and judicial presumption in most states that such agreements are completely open to inspection should be revised for several reasons. First, as noted above, open records laws' contributions to creating an informed electorate are questionable, if they exist at all. (16) Second, in contrast, settlement agreements have clearly established benefits--resources conservation--and have been declared sound public policy. (17) Yet open records laws threaten the confidentiality protections, the lynchpin of most agreements. (18) Third, the cost savings of confidential settlement agreements are particularly significant in the context of public education school finance; school districts rarely receive the amount of public resources required to meet increased demands for student performance. (19)

To be sure, transparency is a laudable policy goal. (20) The public has a right to know their government's actions, and that idea is deeply rooted in our history. (21) But too much public oversight (and publicity) impedes government actors from efficiently executing their assigned responsibilities, (22) including making personnel decisions. The task, then, is to balance between competing policy goals of transparency (that, again, have theoretical benefits) and of encouraging settlement agreements (which has demonstrable value to public entities and taxpayers.) (23)

The article proceeds as follows: Part I overviews state open government laws; Part II discusses the cost-effectiveness of confidential settlement agreements in efficiently resolving disputes; Part III examines cases at the intersection of open records requests and confidential settlement agreements; Part IV proposes some alternatives that balance the public's right to know about their government and school officials' need to use confidential agreements to achieve cost savings to the taxpayer and benefit to schools.

1. PUBLIC ACCESS TO GOVERNMENT RECORDS

   1. Common Law

      At common law, the public did not enjoy a right to access government information as a citizen or taxpayer. (24) Government officials considered the purpose of the review, (25) and inspection was predicated on the idea that the information sought had value for purposes of litigation. (26) The scope of that right later expanded to include other legal documents, like deeds, tax regulations, and wills. (27)

      Courts expanded public access to records over time. (28) A valid public or private interest permitted inspection. (29) Nevertheless, a requirement that there be a valid interest remained a precondition of access and right to inspect public records. (30) Mere curiosity was not sufficient grounds to access public documents. (31) The valid interest requirement has been removed by legislatures with the creation of open government laws. (32)

   2. Constitutional and Statutory Rights to Inspect Public Records

      1. Origins of Public Records Laws

         Open government statutes emerged in federal and state law in a post-Watergate era. (33) State open government laws have two primary components which are those: (1) governing public access to meetings and; (2) covering government records. (34) The latter is the concern of this paper. All fifty states have created a right for inspection of government records by way of statute (35) and some have such a right embedded in their state constitution. (36)

         The state public policy behind such laws is to ensure government transparency and, therefore, an informed electorate. (37) For example, the "Declaration of Policy" of Wisconsin's open records statute reads as follows: "[i]n recognition of the fact that a representative government is dependent on an informed electorate, it is declared to be the public policy of this state that all persons are entitled to the greatest possible information regarding the affairs of government...." (38) This legislative public policy goal of government transparency assumes that a broad public right and presumption that government documents are subject to public inspection is an integral part of an informed, self-governing population. (39) Courts emphasize this policy basis (40) and it can be dispositive in those cases concerning settlement agreements made by school boards. (41) Extending this logic, some contend that access to government records is a constitutional right under the First Amendment. (42)

         Because legislatures have expressed a policy favoring disclosure, courts presume records are open to inspection. (43) Those seeking to enjoin release bear the burden of overcoming this presumption. (44) There are some exceptions to disclosure, and these are state specific. (45) Some states allow for courts to balance competing interests, such as privacy, against the public's right to review government documents. (46)

      2. Determining a Public Record Open to Inspection

         To be a public record available for inspection the information must be: (a) created by a public body or entity, (b) a public record, and (c) not exempt from disclosure by way of statute or common law exception. (47) These requirements are discussed immediately below.

         i. Public Body

         Some public agencies are creatures of statute and easily satisfy the definition of a "public body." A city or town clerk, board of selectmen, or mayor's office, are clear examples of public entities. (48) Public schools and their administrative offices are creatures of state statute and, therefore, public entities. (49) Questions arise as to whether third-party vendors or agencies contracted by the state are public bodies subject to open records laws. (50) In the education context, courts have been asked to determine if charter schools, (51) interscholastic athletic associations, (52) unions (53), or student groups satisfy this prong. (54)

         ii. Statutorily Defined Public Records Open to Access and Exceptions

         To be accessible for public inspection, the information requested must also be a "public record," a defined term under state statute. (55) A record created by a public entity is presumed to satisfy this requirement. (56) Moreover, states broadly define the definition of "record." For example, New Hampshire's "Right to Know" law defines government records as:

         [A]ny information created, accepted, or obtained by, or on behalf of, any public body, or a quorum or majority thereof, or any public agency in furtherance of its official function. Without limiting the foregoing, the term "governmental records" includes any written communication or other information, whether in paper, electronic, or other physical form, received by a quorum or majority of a public body in furtherance of its official function, whether at a meeting or outside a meeting of the body. The term "governmental records" shall also include the term "public records." (57) To be sure, information may be a public record, but excepted from public inspection. (58) State statutes specifically enumerate certain exclusions. (59) For example, the Pennsylvania legislature has declared that numerous documents are not public records subject to public inspection, including:

         A record maintained by an agency in connection with the military, homeland security, national defense, law enforcement or other public safety activity that, if disclosed, would be reasonably likely to jeopardize or threaten public safety or preparedness or public protection activity or a record that is designated classified by an appropriate Federal or State military authority," (60) among numerous others. (61) Other states have similar provisions. (62)

         iii. Court Determined Public Records and...