Weeks before the uproar over revelations that U.S. Rep. Elizabeth Esty paid her chief of staff a $5,000 severance package and signed a non-disclosure agreement concerning sexual harassment allegations made against him, the Connecticut state Senate raised Senate Bill 503, An Act Requiring Approval of State Agency Settlement and Nondisclosure Agreements.”  The bill, if approved by the General Assembly – would require legislative approval of certain payments made to state employees pursuant to a nondisclosure or separation agreement.

The bill provides in part that any state agency that is a party to a separation or nondisclosure agreement shall prepare a written summary of such agreement, with no personal or identifying information included in such summary and the name of the employee redacted. The summary, together with the amount of payment proposed to be made to the state employee pursuant to such agreement, shall be filed by the employing state agency with the clerks of the House of Representatives and the Senate within ten days after the date on which such agreement is reached. The request for approval of the payment and agreement shall be deemed approved if the General Assembly fails to vote to approve or reject such request within thirty days after such filing or submission.

The bill further provides that the General Assembly may approve any such payment and agreement as a whole by a majority vote of each house or may reject such payment and agreement as a whole by a two-thirds vote of either house if it determines that there are insufficient funds for full payment.

If rejected, the matter shall be returned to the parties for further negotiation.

Senate Republican President Pro Tempore Len Fasano-R and Representative Holly Cheeseman-R both submitted testimony in support of the bill.  Sen. Fasano expressed “grave concerns” about state agencies doling out sometimes six-figure payments to employees without the legally required oversight or authorization.  He cited recent examples, including over $376,000 in severance payments made to four senior level managers at Access Health CT who were secretly involuntarily terminated by CEO James Wadleigh between 2015 and 2017. Each of them received at least six months of salary and benefits pursuant to separation agreements that were not reviewed by any other state entity. Some of these agreements also reportedly included nondisclosure language, calling for employees to not disclose the terms of their settlement and to “not make any disparaging or defamatory statements” about Access Health CT.

Senator Fasano further indicated that state auditors reported this problem in their 2016 Annual Report, which referenced payments, some exceeding $100,000, made to state employees as part of non-disparagement and non-litigation agreements. According to the report, these agreements were neither reviewed nor approved by the state Attorney General or the Governor, as required by Connecticut General Statute Sec. 3-7 (c).  He also proposed modifications to the bill, including switching oversight from the General Assembly to the Office of the Attorney General.

In her testimony, Rep. Cheeseman also referenced the state auditor’s annual report which “revealed a need to stop offering six-figure separation and non-disparagement agreements to former employees without third-party oversight.” “The University of Connecticut, The UCONN Health Center, and The Connecticut Lottery Corporation have made numerous such payments and this is the second year in a row that the auditors have made such a recommendation in their annual report to the General assembly.”

The Joint Committee on Government Administration and Elections voted the bill out of Committee on March 23, 2018. It is headed to the Senate floor for action but has not yet been calendared.