Racing Louisville scandal: Metro Council approves limits on non-disclosure agreements
Update: The Metro Council unanimously approved the ordinance, which was slightly amended, during the March 2 meeting.
A Metro Council committee unanimously approved Tuesday a proposal that would prevent organizations that receive taxpayer dollars from using non-disclosure agreements in cases involving sexual assault and harassment.
The ordinance from Metro Councilwoman Cassie Chambers Armstrong, D-8th District, and Metro Councilman Jecorey Arthur, D-4th, cleared the Labor and Economic Development Committee and was introduced in October in the wake of an investigation detailing allegations of sexual assault and misconduct on the part of ex-Racing Louisville FC head coach Christy Holly.
The independent investigation was conducted by former U.S. Deputy Attorney General Sally Yates on behalf of the U.S. Soccer Federation into abuse at multiple National Women’s Soccer League clubs and included alleged graphic abuse by Holly toward then-Racing defender Erin Simon.
Holly, who led Racing's inaugural season, was fired in August 2021.
Christy Holly NDA:Did Racing Louisville's NDA with Christy Holly protect players or enable abuse?
The 172-page report, along with several other NWSL coaches, described repetitive incidents of misconduct that Simon dealt with from Holly, along with Holly’s "verbal and emotional abuse" of other players "and a relationship with a staff member that caused problems."
The Yates report described how Racing signed a non-disclosure and non-disparagement agreement with Holly that kept officials from sharing more about his behavior with club leaders, initially pitching it to players in 2021 as a way to protect Simon’s privacy.
But players and legal experts pointed out NDAs can benefit offenders rather than victims.
The Metro Council ordinance says no “covered entity may enter into a settlement agreement that prevents or restricts the disclosure of factual information” in cases involving sexual assault, sexual harassment, workplace harassment or discrimination, failure to prevent workplace harassment or discrimination, or retaliation against someone who reports or opposes harassment or discrimination.
A covered entity, under the ordinance, is defined as “receiving any contract or...incentive worth at least $50,000,” or receiving at least $50,000 in grants or general budget funds, from Metro Government.
Each group would have to report complaints of workplace sexual harassment and sexual assault along with the complaint outcomes annually to the city, with the report given to the Office of Equity. Exceptions apply if the victim wants information to remain confidential, has consulted with an attorney, is receiving additional compensation and has at least 10 days to "contemplate the agreement and change their mind," per the ordinance.
No report would contain personally identifiable information. The ordinance would take effect six months after its passage.
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Any group violating the ordinance would become ineligible for contracting with or receiving incentives and funding from Metro Government for five years, and violators would owe damages to the city worth 10% of the contract, incentive or grant.
Chambers Armstrong told Labor and Economic Development Committee members 17 states restrict certain NDAs and four states ban them, with Congress also passing last year federal limits on NDAs in cases of sexual assault and harassment.
"I think it’s especially important when we use taxpayer dollars that we promote transparency, that we make sure that we are not complicit in allowing hostile workplaces continue to exist and that we make sure we're doing everything in our power to give survivors a voice and to shine light where it needs to be shown," Chambers Armstrong said.
A second report commissioned by the NWSL and its players association was released in December and disclosed that Racing gave Holly a severance payment of $14,000 and prohibited its employees from speaking about his misconduct — even to police — as part of the non-disclosure and non-disparagement deals. If either party broke the agreement, they would have to pay the other $5,000.
Investigators condemned the agreement, writing the non-disparagement provision "prevented the club from being able to confirm Simon’s account if she chose to share her experience publicly."
In early January, the NWSL permanently banned Holly and ex-coaches who led three other clubs from the league. The NWSL also fined Racing $200,000 and required the club to hire a sporting staff — i.e., coaches and general managers — that is completely separate from the Louisville City staff.
The Racing staff must report directly to ownership, according to the NWSL. Racing has been in the process of hiring a general manager.
In a statement following the release of the December report, Racing said it entered the separation agreement with Holly "on advice of the club's former counsel...to protect our players from being named publicly." It now says that decision was wrong, adding current Soccer Holdings president James O'Connor was not involved in crafting the non-disparagement provision.
A sizeable, vocal contingent of fans of Racing and Louisville City FC – the city’s professional men’s soccer club – have demanded the resignation or firing of several executives with Soccer Holdings, the ownership group for both clubs, with most attention directed at O’Connor.
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O’Connor and other executives have not stepped down, with the organization instead saying that hiring Holly was a “mistake."
But various current and former Racing Louisville players have also since spoken out about O’Connor and other leaders not doing enough to hear their concerns over Holly before he was fired, with Racing only initially describing Holly’s firing as “for cause” and not mentioning any of his alleged behavior.
Racing is preparing to begin its third year in the NWSL, with head coach Kim Björkegren leading the team.
The new ordinance notes the Kentucky Association of Sexual Assault Programs estimates 47.7% of Kentucky women have experienced sexual violence and that the federal Equal Employment Opportunity Commission found 32.4% of workplace discrimination complaints were related to sexual harassment.
It also mentions a study from a University of Pennsylvania professor that found “broad non-disclosure agreements inhibit workers from filing sexual harassment complaints with federal agencies” and “that limiting how employers can use these nondisclosure agreements led to more public information about bad behavior at companies.”
The ordinance could come up for a vote before Metro Council as soon as its next meeting.
Brooks Holton and Bailey Loosemore contributed to this story.
Reach Billy Kobin at firstname.lastname@example.org
This article originally appeared on Louisville Courier Journal: Racing Louisville sexual misconduct: Metro Council nondisclosure deals