The document seemed harmless enough — a “release of all claims” in exchange for a cash settlement. Lowe’s sent it to one of our readers when she asked it to fix a botched kitchen installation.
But a closer look shows it was anything but harmless.
The release required her to destroy any evidence that supported her claim against Lowe’s and to stop her from sharing her story with anyone, which would include our advocacy organization.
And these documents are becoming common. Viking Cruises routinely pushes these confidentiality agreements in front of its customers before offering them compensation for cruises that have gone wrong, as it did in this recent case.
Although there’s no data on the use of release forms, almost one-third of the U.S. workforce is bound by nondisclosure agreements, a similar kind of contract, according to a recent study by Harvard Business Review.
Let’s take a closer look at these legal documents.
- Why do companies have confidentiality agreements?
- What’s in Lowe’s release form?
- Should you sign a release form?
A quick note about this case. I have contacted Lowe’s about it, and it has not answered. It has, however, responded directly to the customer. I’ll tell you what it said in a minute. First, let’s talk about this case and what it means.
What these documents mean
This reader’s case, which my team is still mediating, involved kitchen cabinets that were improperly installed by a Lowe’s contractor. She presented the company with evidence of shoddy workmanship. In exchange, the company offered to settle her claim.
Normally, consumers sign the release, take the money and are never heard from again. Not this one. The money would not cover her repairs and she did not care about Lowe’s stated desire to keep her case out of the media. So she sent me the entire settlement agreement. (Related: My mattress was soiled. Can I get a refund from Hilton?)
Why do companies like Lowe’s have settlement agreements that require you to keep quiet? Simply put, these stories of ruined kitchens are bad for business. If Lowe’s can keep these verifiably true accounts out of the media, it will directly benefit their business. (Related: Can American Airlines find my irreplaceable iPhone before it’s too late?)
The same thing is true for companies like Viking, which has tried to stop us from publishing true accounts of its problem cruises by requiring customers to sign a confidentiality agreement. (There’s a workaround, which I’ll tell you about in a moment.)
Basically, these legal documents are the equivalent of hush money — we’ll pay you, but you have to agree to shut up. And you can never tell anyone about what happened, especially a media organization.
So let’s take a closer look at how they do this.
What’s in Lowe’s release form?
The Lowe’s agreement starts by asserting that the entire agreement is secret.
Confidentiality
Releasor agrees that this Confidential Settlement Agreement and Release of All Claims, as well as the alleged facts giving rise to Releasor’s claims, shall remain confidential and shall not be shared with any third party, including but not limited to, any media outlet or public forum.
Then it gets into specifics.
Non disparagement
Releasor agrees to immediately cease communication with media, including social media, if any, and destroy any video and photographs taken regarding the construction project relating to the contract numbers listed above, whether or not said video and photographs were filmed by Releasor or a third party. Releasor further agrees that he/she will not provide or post any additional video and/or photographs described herein to any third party, media or social media.
Moreover, subject to the destruction obligations above, Releasor agrees to keep the existence of any video and photographs described herein confidential. A breach of this confidentiality provision is a material breach of this Agreement, subject to liquidated damages in the amount of the monetary consideration recited herein.
In other words, stop talking to the media, destroy all photos and videos — and if you don’t, we’ll ask for our money back.
But then it goes further.
In addition to maintaining the confidentiality of this claim, settlement and video/photographs described herein, Releasor stipulates and agrees that he/she will not make any oral or written statement or take any other action, including making any statements to a third party, media and social media, that disparages, criticizes or may be considered harmful, derogatory or detrimental in any manner whatsoever to the name or business reputation of Lowe’s, its employees, its management or its practices.
Releasor understands and agrees that his/her entitlement to the settlement amount described herein is conditioned on him/her not disparaging Lowe’s in any manner as described above.
That means you can never say anything bad about Lowe’s ever again.
Oh, and one more thing. If you sign this agreement, you can’t sue Lowe’s or file an insurance claim against it.
Additional terms
Releasor agrees that the consideration given by Lowe’s as settlement is the compromise of disputed claims and that the payment made hereunder is not to be construed as an admission of liability on the part of the party or parties hereby released by whom liability is expressly denied.
Releasor additionally agrees to indemnify and hold Lowe’s harmless from any claim, demand, judgment, order, lawsuit, obligation or other liability, including, but not limited to, attorney’s fees, costs, expenses and any claim of subrogation from any third party, including without limitation insurance carriers, (1) arising from, out of, or relating to the subject matter of this release or the consideration paid pursuant to the same or (2) arising from, out of, or relating to the undersigned’s continued use of, or subsequent sale, assignment or transfer to a third party of any account, product or property (whether personal or real) at issue.
That’s some agreement! Lowe’s is basically buying your silence and ensuring you can never go to court for a problem arising from your purchase.
Should you sign a release form?
The Lowe’s release of claims agreement is worrisome for several reasons:
- It prohibits consumers from discussing the settlement terms or the facts underlying their claims with any third party, including us.
- It silences a consumer’s ability to criticize Lowe’s and requires them to destroy any video or photographs related to the construction project.
- A non disparagement clause stops them from making any negative statements about Lowe’s even if those statements are truthful.
Bottom line: The release forces consumers into silence and contains a broad waiver of known and unknown claims. This could be problematic if the consumer is unaware of the full extent of their potential claims against Lowe’s. (Related: Their North Atlantic cruise ended in the hospital. Why won’t travel medical insurance pay their $6,914 claim.)
While the release provides our reader with a monetary settlement, it also imposes significant restrictions on her ability to discuss the settlement, criticize Lowe’s, or pursue any future claims related to the install sales contract numbers.
I’m not a lawyer, but as a consumer advocate and a member of the media, I think this agreement sets a terrible precedent. If she wants to sign it, she can. But I would suggest she should first consult a lawyer.
What will happen to this case?
As I mentioned before, Lowe’s knows that I have the full text of this settlement agreement and I have asked the company about the case. In response, a representative has reached out to the reader and pressured her to sign the document — presumably to ensure that she stays quiet.
But there is a workaround.
If you ever have a confidentiality agreement that you’re tempted to sign, you can do so and ensure the truth gets out there. It’s easy. Just tell your favorite media organization about the settlement before you sign it. Send it all the details. Make sure it has all the information they need to write its story. Then, and with the blessing of your attorney, go ahead and sign if you must.
But there’s a better way. Companies like Lowe’s and Viking should be fixing their problems without trying to buy your silence. If enough consumers refused to sign these restrictive agreements and made a lot of noise about it, they would have to stop using them.
And that would be good for everyone.
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