Lawyers can’t do it and doctors can’t do it. Now thousands of other licensed professionals in California won’t be able to do it.

Assembly Bill 2570, signed by the governor in September, will kick into effect January 1 and prohibit licensed professionals from adding gag orders to civil suit settlements that prevent consumers from working with authorities conducting investigations of wrongdoing.

These so-called “regulatory gag clauses” are routinely inserted into settlements, blocking complaints to, or cooperation with, the boards and commissions in the Department of Consumer Affairs (DCA) that oversee licensed professionals like pharmacists, accountants, physician assistants and veterinarians.

In effect, up until now, a plaintiff who has been damaged could be paid by a licensee for silence. The Center for Public Interest Law (CPIL) characterized this in the Senate bill’s formal analysis as a quandary faced by consumers: “I should take the money and run” vs. “I’d really like to help prevent what happened to me from happening to others.”

Former Governor Arnold Schwarzenegger vetoed similar legislation three times, claiming that it would be double jeopardy for a licensee to pay a settlement and still be the subject of a regulatory complaint.

CPIL Administrative Director Julie D’Angelo Fellmeth said, “The ability of licensed professionals to insist upon clauses secreting information about their own misconduct from their own regulators encourages serial wrongdoing by licensees who can cheat or injure consumers or patients, settle, and repeat the misconduct again and again and again—with the regulator never the wiser. But, no more.”

“They’re immoral,” she said. 

–Ken Broder

To Learn More:

New Law Bans Gag Clauses in Settlements with Licensed Professionals (by Christina Jewett, California Watch)

Brown Signs Bill Prohibiting Licensed Professionals from Keeping Their Misconduct Secret (Center for Public Interest Law at the University of San Diego School of Law)

Assembly Bill 2570 (California Legislative Information)