Waste Of The Day: Secret Settlements Get Taxpayer Money

Authored by Jeremy Portnoy via RealClearInvestigations,

Topline: Eight Massachusetts state agencies and 13 colleges spent $6.8 million to settle grievances, partly in secret, brought by their own employees from 2019 to 2024, according to a Jan. 16 report from State Auditor Diana DiZoglio. 

At least 80 of the 263 settlements contain confidentiality language such as a nondisclosure agreement — to keep certain details confidential between the two parties — which the audit claims is banned by state guidelines. 

Key facts: The Massachusetts Port Authority transit agency was responsible for 11 of the settlements, costing taxpayers $1.7 million. Most of the money came from a $1.4 million settlement in 2022 with an employee who alleged they were denied a promotion because of their gender. The details are sealed by an NDA.

Six of the confidential settlements involved alleged sexual harassment, and two involved alleged racial discrimination. Most of the others were about violations of collective bargaining agreements and employees who were fired without cause.

NDAs were seemingly used on an arbitrary basis. None of the colleges and state agencies included in the audit had a written policy explaining when confidentiality language should be used, except the inspector general’s office.

“By not having a documented policy on the use of confidentiality language in state employee settlement agreements, there is a risk that confidentiality language may be abused to cover up harassment; discrimination; or other inappropriate, unlawful, or unethical behaviors, potentially allowing perpetrators to continue to remain in their positions and engage in further inappropriate, unlawful, or unethical behavior,” auditor DiZoglio wrote.

All of the colleges and state agencies receive legal assistance from the state attorney general’s office. The office’s guidelines prohibit nondisclosure agreements, and the attorneys told auditors that all state agencies were made aware of the guidelines. 

DiZoglio argued that the NDAs may not even be enforceable. In June 2013, Suffolk County Superior Court sided with the Boston Globe newspaper in ruling that settlements between state agencies and their employees are public records.

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Background: The audit is a follow-up to a 2025 report that found 75 state agencies had spent $41 million on more than 2,000 employee settlements from 2010 to 2022.

Summary: Massachusetts’ NDAs hurt the public twice. They essentially use taxpayer funds to cover up potentially unethical behavior perpetrated using taxpayer funds.

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