The enforceability of nondisclosure agreements has been a hot topic in recent years, with controversies surrounding Dan Snyder, Cristiano Ronaldo and Deshaun Watson all involving NDAs.
Add a Tiger Woods controversy to the list.
Last week the famed golfer was sued in a Martin County (Fla.) circuit court by his former girlfriend of six years, Erica Herman, over an NDA she and Woods signed in 2017. Herman, who also worked for Woods, seeks a judicial declaration that the NDA is invalid and unenforceable.
The NDA is at issue because of a separate lawsuit filed last October, also in Martin County. Herman sued the Jupiter Island Irrevocable Homestead Trust, which Woods established, and which owns an interest in a Hobe Sound, Fla., house that Herman lists as her and Woods’ residence.
Herman says she had an oral tenancy agreement to live there, and that in October agents of the trust wrongfully expelled her. She claims the trust caused her at least $30 million in damages, a figure predicated on what Herman says is a right to continue to live in the house—worth $45.8 million, according to Zillow—for the next five years.
The trustee, Christopher Hubman, paints a starkly different account. Through attorneys last December, he argued that Herman sued the trust instead of Woods as a ruse to “evade her obligation to adjudicate her claims in a confidential arbitration” and to “gain leverage by litigating her disputes with Mr. Woods in a public forum.”
The NDA requires that “any and all disputes, claims or controversies … of any kind or nature whatsoever” are to be resolved by “confidential BINDING arbitration to the greatest extent by law” (capitalization is in the NDA). Hubman claimed that Herman’s grievances concern both “the breakup” of her and Woods’ relationship and “Woods’ decision not to permit Ms. Herman to reenter his personal residence following their breakup.”
NDAs are usually enforceable when they are reasonable. They’re often used where employees with access to trade secrets or proprietary data agree, in exchange for compensation or other benefits, to not disclose certain information. NDAs sometimes contain arbitration provisions, which are especially attractive to publicly traded companies—and celebrities—since unlike litigation, arbitration is private and confidential.
NDAs began to attract substantial criticism during the height of the #MeToo movement, particularly when NDAs were used to silence victims of Harvey Weinstein, Larry Nassar and other sexual predators.
Last year, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act into law. The Act empowers individuals who raise sexual assault or sexual harassment claims with the option to sue, even if they already relinquished that right in an NDA. A judge has the authority to decide if an arbitration requirement is enforceable. Biden also signed the Speak Out Act, which renders non-disclosure and non-disparagement clauses in so-called “pre-dispute agreements” (meaning agreements signed before alleged wrongful conduct happens) unenforceable when they concern sexual assault or sexual harassment issues.
Herman argues that both acts apply, though neither of her lawsuits alleges sexual assault. An arguable reference to harassment is also not portrayed as sexual in nature.
In her complaint against the trust, Herman says that unnamed persons used “trickery” to dupe her into packing a suitcase “for a short vacation.” When she arrived at the airport, these individuals “told her she had been locked out of her residence … [and] she was not allowed to return.” Herman claims her demands to re-enter were rejected, her personal belongings were removed, and people connected to the house “misappropriated in excess of $40,000 in cash that belonged to her.” They also allegedly made “scurrilous and defamatory allegations about how she obtained the money.” The complaint does not mention the words “harassment” or “harass.”
Attorneys for Woods have not yet answered Herman’s complaint against him, but they have filed multiple briefs regarding her lawsuit against the trust. Last Thursday, Woods motioned to intervene, arguing “the disputes raised by Ms. Herman in the lawsuit against the trust are, in fact, disputes between Ms. Herman and Mr. Woods.” Woods contends he has “an indisputable right to intervene” because “he is a beneficiary of the trust” and “he is the occupant of and owner of a life estate in the Residence at issue.”
Woods also insists he “never negotiated an oral tenancy agreement with Ms. Herman” or transferred any rights of possession to the residence. She was instead invited to “live with him as a guest.” Woods says that after he “notified” Herman that “he was breaking off their relationship” he told her she was “no longer welcome” at the house. He then “arranged for Ms. Herman to stay at a local luxury resort and provided funds she could apply toward a new residence.”
The motion adds that if Woods is allowed to intervene, he and the trust will immediately petition the court to declare that Herman “must be compelled to arbitrate.” Herman’s “landlord-tenant claims do not constitute a sexual harassment dispute” as defined by law, Woods maintains.
Both cases are before Judge Elizabeth Metzger. If she sides with Woods, the cases will be sent to arbitration and, for all intents and purposes, not heard from again. If Metzger opts to continue the litigation, she will hear arguments regarding whether an oral tenancy agreement was formed and what damages, if any, Herman suffered.
Herman describes an oral agreement wherein she “performed valuable services at the request of Defendant’s agents” and the trust “fully paid … all expenses that related to” her residency. Woods, calling her a “guest,” says that Herman gained no right to “live rent-free and expense-free in Mr. Woods’ personal residence for the next five years.”
Even if Herman could establish there was an oral agreement, it’s not clear how she could establish the agreement was set to last five years. Under contract law, most contracts that won’t end in one year must be in writing to be enforceable. The calculation for $30 million in damages would also face close scrutiny.