Whether you own a local, successful landscaping company, you are a famous author, a self-employed professional, or the owner or co-owner of a major closed business, one of your primary concerns in a personal divorce will likely be privacy. As a business owner, big or small, your reputation is everything. Airing dirty laundry is not only potentially embarrassing, it is also simply bad business.
Privacy in New Jersey Divorces Involving Business Owners
And I mean that quite literally, as it does not take much imagination to perceive of one’s competitors waiting around like hungry alligators, ready to gobble up any information that may become public about your business. Not only are pleadings generally considered public documents, generally readily available to anyone asking, but trials themselves will be a public affair. Competitors, or business enemies could sit in the galley eating the proverbial popcorn while the drama of your marriage plays out on a public stage. Sure, your attorney can file motions to attempt to keep certain trade secrets sealed, but by then it’s all but too late.
And worse yet, your spouse and her lawyer likely know this. They may be ready to cut their nose to spite their face, or at least bluffing that they are. They are standing ready, hoping you will take a crummy deal to make the “dirty laundry” (real, embellished or imagined) go away. How do you outmaneuver them, and get out ahead of a potential public relations disaster? After all, in New Jersey, there is generally no confidentiality to a divorce filing. As stated above, ours is a state that is big on “transparency.” The public is considered to have the right to know, particularly if you are a public figure.
Protecting Business Owner’s Privacy Interests in a Divorce
First, an attorney experienced in helping business owners through a personal divorce will game-plan the terrain from the moment they are retained. They will advise you of options such as arbitration, where you can proceed outside the traditional legal process. There is a reason so many celebrities will work through an arbitrator or settle the case prior to filing. It is a way of keeping the details of the divorce (and the settlement) outside the prying eye of the public. The hard part, of course, is getting the other side to agree. Your attorney will need to do their best to get the other side to understand that what is bad for business now, may be mutually destructive.
Another advantage to working out a case in arbitration or mediation, is if you believe there may be certain tax improprieties within your personal life or business. In the case of Sheridan v. Sheridan 247 N.J. Super 552 (Ch. Div. 1990) the court held that judges have an ethical requirement to report tax irregularities or the suspicion of any funds obtained by tainted means. In Sheridan, the defendant husband testified that he received $180,000.00 (in 1983 currency) from his own father, whereas plaintiff wife alleged defendant had received the money by skimming from his job as an oil-delivery truck driver. Id. Now, it is unlikely that the facts of your case, dear reader, will be quite so scandalous. But, nonetheless, please remember at all times that not only will your finances be under a microscope in a personal divorce, but those of your business interests will be as well. If for any reason you are not comfortable with that, then the Sheridan case and its holding is important to remember.
Of course, there is also the matter of your children. Now, or if not now then someday, they may look up the facts of your case. Even if you and your soon-to-be ex agree to not disparage each other to your children (which you should!) there is also the solid chance that the “dirty laundry” of your case will make it to your children. This too is something to bear in mind throughout your litigation.
Can You Seal Your Records?
Again, it is unlikely that the Court will agree to seal your divorce records, although there is a court rule that at least allows you to try. You will have to prove under R. 1:38-11, and you will have the burden of such proof, that good causes exists to seal the record and that such disclosure (1) “will likely cause a clearly defined and serious injury to any person or entity and (2) that the person or entity’s interest in privacy substantially outweighs the presumption that all court and administrative records are open for public inspection pursuant to R. 1:38.” And yes, note the word “substantially” to get a true idea of the heft of the burden.
As you can see, you and your attorney will need to be strategic in ensuring you follow a process to maintain the confidentiality of any documentation or information. All the more so if you have signed certain NDA’s (non-disclosure agreements). There may be instances where co-owners will wish to hold your feet to the fire while you go through a divorce, as the divorce of one partner can open up a can of worms for an entire business operation, even for those not going through a divorce. To comply with your business agreements as well as the New Jersey rules of discovery in a divorce, is going to take ingenuity on your part, and that of your attorney. Good thing as a business owner ingenuity and determination are two trains you have without doubt.
Conclusion
While privacy issues, and the best practices on how to address them will depend on the specific facts of your case, as with anything in New Jersey divorce law, hopefully this overview of the issues will help you as you begin to consider the ramifications of divorce. Getting out ahead of such issues, prior to anything being filed, is often the best course of action, for all the reasons stated above.
Partner with Carl Taylor, Esq.
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