Mount Wachusett Community College - Finding 2

Mount Wachusett Community College did not have a transparent or accountable process related to employee settlement agreements, including those containing non-disclosure, non-disparagement, or similarly restrictive clauses.

Overview

MWCC did not have documented internal policies or procedures for reviewing and approving the processing and reporting of employee settlement agreements. Additionally, MWCC did not have documented policies or procedures in place to review the language used when entering into 15 employee settlement agreements during the period of January 1, 2019 through December 31, 2023. Further, our review showed that 13 of the employee settlement agreements that MWCC entered into contained non-disclosure, non-disparagement, or similarly restrictive clauses.

If MWCC does not have a transparent and accountable process to handle employee settlement agreements, especially those containing non-disclosure, non-disparagement, or similarly restrictive clauses, it cannot ensure that employee settlement agreements are handled in an ethical, legal, or appropriate manner. Further, there is a risk that confidentially language may be used to cover up harassment, discrimination, or other unlawful behaviors, potentially allowing perpetrators to continue to remain in their position and engage in further unlawful behavior. Impacted employees may also not know that non-disclosure terms may be unenforceable under Public Records Law.

Further, a lack of a documented policy on the use of confidentiality language also creates the risk that confidentiality language could be used to protect or obscure from public view repeated instances of poor management or inappropriate or unlawful behavior at agencies of government. This perpetuates the risk that public employees may continue to face abusive or harassing treatment from perpetrators, and that the taxpayers be required to pay for the costs of settlements or litigation in connection with this continued behavior.

The table below summarizes the dates, amounts, and payment methods (if applicable) of the 15 employee settlement agreements MWCC entered into during the audit period.

Were Allegations Specified in the Agreement?	Settlement Date	Amount	Method of Payment	Did the Agreement Include Non-disclosure, Non-disparagement, Similarly Restrictive Clauses?
No*	May 19, 2020	$90,000.00	CTR	Yes
No**	August 19, 2020	Not monetary	N/A	Yes
No*	October 15, 2020	Not monetary	N/A	Yes
No**	July 16, 2021	Not monetary	N/A	No
No*	September 15, 2021	Not monetary	N/A	Yes
No*	October 8, 2021	$25,000.00	CTR	Yes
No*	June 30, 2022	$55,000.00	CTR	Yes
No*	September 29, 2022	Not monetary	N/A	Yes
No*	December 13, 2022	Not monetary	N/A	Yes
No**	December 13, 2022	$29,500.00	CTR	Yes
No*	April 12, 2023	Not monetary	N/A	Yes
No*	April 21, 2023	$3,153.15	Payroll	Yes
No**	April 24, 2023	$1,100.00	CTR	No
No**	May 1, 2023	Not monetary	N/A	Yes
No*	August 18, 2023	$17,899.88	CTR	Yes

*    Settlement is related to an employment action (for example, employee termination due to alleged performance issues).

**  Settlement is allegedly related to a general human resources issue (or example, an agreement to remove a letter and/or an evaluation from an employee’s human resources file). 

Authoritative Guidance

Section 5.09 of Title 815 of the Code of Massachusetts Regulations states,

(1)  Responsibility of assigned attorney or staff person: Preparation of Reports. When litigation involving a monetary claim against the Commonwealth covered by these regulation terminates in a final Settlement or judgment with regard to such a claim, the agency attorney or staff person assigned to handle or monitor the claim shall do the following:

(a)  Prepare a report indicating:

1. the principal amount of the settlement or judgment;
2. the amount of any attorney’s fee award;
3. the amount of any interest award or accrued, and whether the interest continues to accrue post-judgment;
4. a request for payment of the amount;
5. a description of the basis for the request, (e.g., Court order or settlement agreement); and
6. whether the assigned attorney desires to award the payment check to the claimant;

(b)  Forward the report with a copy of the settlement or judgment just described to the General Counsel of [CTR] within the time frames set forth in [Section 5.09(2) of Title 815 of the Code of Massachusetts Regulations]. . . .

(2)  Time for preparation of reports. The report . . . shall be sent by the agency attorney to the General Counsel of the Comptroller:

(a)  if based on a settlement agreement, within 15 days of signing of the final settlement papers; or

(b)  if based on a judgment against the Commonwealth or any agency, within fifteen days of the Commonwealth’s decision not to appeal; or

(c)  if based on a judgment against the Commonwealth or an agency, where the Commonwealth decides to take an appeal from the judgment, within fifteen days of any final order on appeal or in remand proceedings, if such remand proceedings are ordered.

Reasons for Issue

During an interview, MWCC’s vice president of human resources stated that there is no written policy regarding employee settlement agreements as they refer to the various bargaining unit agreements as well as the non-unit professional Personnel Policies manual when entering into employee settlement agreements. For settlements that result in monetary payments in the form of lump-sum payments, MWCC uses CTR’s Settlements and Judgments Policy as the default for handling the settlement.

Recommendations

1. MWCC should develop, document, and implement a policy related to employee settlement agreements.
2. To help increase transparency and accountability, MWCC should track and document all employee settlements entered into by MWCC.
3. To help increase transparency and accountability, MWCC should track and document all complaints that include non-disclosure, non-disparagement, or similarly restrictive clauses in employee settlement agreements.

Auditee’s Response

Elaborating on the referenced interview statements regarding the applicable collective bargaining agreements (CBA) and the Non Unit Professionals Personnel Policies Handbook provides additional relevant context regarding when such agreements are entered into. Of the 15 settlement agreements completed during the audit period, 9 of the 15 were arrived at following required processes defined and agreed to in the applicable CBA that include provisions for pursuing a mediated settlement and failing that, arbitration and a decision that may include a monetary award for actual damages. Of those settlement agreements including a lump sum payment, 5 of the 7 such agreements involved employees covered by a CBA. Although settlement agreements are not tracked in a stand-alone manner, limited information regarding grievances initiated in accordance with a CBA is maintained by the College in a database that is now being periodically updated on a more regular basis. Going forward and in consultation with the College’s Office of General Counsel, the College will establish written parameters to reference regarding the potential for entering settlement agreements with employees and whether such agreements should include language pertaining to non-disclosure or non-disparagement should such language be sought by any party to such an agreement.

Auditor’s Reply

Based on its response, MWCC is taking measures to address our concerns regarding this matter. We reiterate our concerns that without a fully documented process that increases oversight, there is a potential for settlements that include confidentiality language that could be misused, or possibly abused, to protect perpetrators and cover up unlawful or unethical behavior. We will follow up on this matter, both related to settlements covered by CBAs and those not, in approximately six months, as part of our post-audit review process.

Date published:	December 27, 2024