While working out at the gym this morning, the morning news was playing on the gym’s television. I was shocked to hear the news anchor claim that a payment of $130,000 by Donald Trump‘s lawyer to Stormy Daniels was unethical.
Lawyers are required to maintain a trust account for the purpose of holding and paying out money. I pay money from our law firm’s trust account all the time. While I am not paying “hush” money on behalf of a client, I am paying money to third parties such as Homeland Security filing fees for clients, and court filing fees for clients. In addition, large corporations have sent me settlement funds to pay my clients after my clients have signed a settlement agreement where they agree to keep the terms confidential.
There is nothing unethical or illegal for a lawyer to pay settlement funds from their trust account to their client or to a settling party. In fact, that is the norm. Sometimes I am receiving funds from the lawyer who represents a big corporation, after my client has signed an agreement (like Stormy Daniels did) to keep the settlement terms confidential.
In settling employment law cases, it is standard practice for the aggrieved worker to sign a settlement agreement that says they will keep it confidential and that they won’t disparage the employer. The employer often is not admitting liability, but is rather, buying their peace, in order for the legal claim or lawsuit to go away. No doubt, this is exactly what Donald Trump and his lawyer did in settling any claim brought by Ms. Daniels, or the more recent Playboy playmate who claims she signed a settlement agreement.
In my many years of law practice, I have never had a client want to come forward and breach the confidentiality provision or non-disparagement provision of a settlement agreement. Certainly, my clients could make the same arguments as Ms. McDougal of Playboy or Stormy Daniels.
Historically, when the courts have had these issues, they have required that the complaining party pay back the settlement funds if they now want to proceed with their legal claim. That leaves this Houston employment lawyer and employment lawyer to wonder if companies will stop settling cases if it becomes easy or “fashionable” for workers to take the money and then come back and “spill the beans.” I can see clients saying that, “If Stormy Daniels and Ms. McDougal can tell their stories and keep their settlement money, why can’t I?” If this scenario becomes the norm, it may be more difficult for complaining individuals to settle their cases because a defendant would be unable to “buy their peace.”