North Myrtle Beach shows a pattern of silencing folks. The new gag is for former manager
Records obtained through the Freedom of Information Act show that the City of North Myrtle Beach has a documented history of having former employees sign Non-Disclosure Agreements on their way out the door. The purpose is to prevent the city from looking “bad,” but what about the public’s right to know?
According to the Harvard Business Review, non-disclosure agreements, or NDAs, and similar restraints used to stifle and place restrictions on an employee’s ability to report misconduct to government agencies are illegal.
South Carolina state law does not prohibit former government employees from signing NDAs. Or, even putting it in contracts to get hired.
Previous reporting by The Sun News highlights concerns from South Carolina Press Association attorney Taylor Smith about issuing NDAs to taxpayer-funded employees.
“Non-disclosure agreements impact our marketplace of ideas, and when that marketplace concerns how public money is used or how decisions are made about public business, the harm to the marketplace can be extreme,” he previously said. “Agreements that suppress information which could be used to create a better-formed democracy ... are things that should be avoided.”
Federal government agencies have used NDAs with former employees in the past, but usually only pertaining to matters that involved classified information or national security, a report from the U.S. Government Accountability Office states.
When asked if he had anything else to share about NDAs between the city and former employees, city attorney Chris Noury simply answered “no.”
In North Myrtle Beach, post-employment NDAs have been used multiple times throughout the years, most recently with the resignation of their former city manager, Mike Mahaney, who signed an NDA after leaving his position in October.
Noury declined to answer what goes into the decision-making process for having a former employee sign an NDA.
“That’s something that I don’t think I’m going to get into,” he said. “I think that goes into an area where it would be advice between the city’s attorney and its client, and I’m not going to get into that.”
In Mahaney’s NDA, signed by Mayor Marilyn Hatley on behalf of the city, the city agrees to pay the former city manager more than $320,000 in exchange for his refraining from making disparaging remarks about his former employer.
NDAs can go beyond defamation, libel, and slander laws, which are already on the books because even telling the truth could have legal repercussions.
Hatley did not return The Sun News’ request for comment.
Similar payouts and NDAs have been signed by former North Myrtle Beach since the 2010s, records and previous reporting show.
Based on some of these records that The Sun News received in 2019, the City of North Myrtle Beach was the most frequent local user of these types of agreements, paying out nearly $46,000 to nine departing employees during the 2010s.
At least seven former North Myrtle Beach city employees were paid out and given documents with the same official label, “Transition Resources and Release in Full Agreement,” in 2020.
The city paid $29,230 to the seven individuals, according to the agreements.
A new FOIA request that was submitted last month with the city asks for all contracts or agreements that involve the cessation of former employee’s contracts for the last 20 years. That request was still in progress as of Thursday afternoon.
A copy of Mahaney’s NDA was handed out to the public at a special council meeting in October, and available without filing a FOIA request.
The first part of his payment, $193,379, will be deposited in a lump sum 15 days following Mahaney’s last day of employment and his submission of the agreement and signature at the bottom, the terms said.
The city initiated that payment to him on Nov. 4, North Myrtle Beach’s acting city manager Ryan Fabbri said on Friday.
At first, it wasn’t clear if the document the city drafted for Mahaney to sign was explicitly an NDA, since it’s formally called the “Transition Resources and Release Agreement in Full.”
The day before the meeting, when the October special meeting agenda was released publicly, North Myrtle Beach’s Public Information Officer Lauren Jessie declined to comment on if Mahaney would be required to sign an NDA.
A Freedom on Information Act request to the city on the day of the special meeting on Oct. 22 confirmed that the Transition Resources document is an NDA.
After the special meeting wrapped on Oct. 22, Noury declined comment at the time, instead directing The Sun News to the agreement for further information.
This story was originally published November 11, 2024 at 5:00 AM.
