NDAs and Their Enforceability
- Date: Tuesday 18th June 2019
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MPs have discussed the lawfulness of non-disclosure agreements, following concerns raised by Maria Miller, chair of the Women and Equalities Commission.
Miller says the current use of NDAs in settling allegations of harassment is “at best murky” and sometimes a “convenient vehicle for covering up unlawful activity with legally sanctioned secrecy”.
A consultation into banning the use of confidentiality clauses in covering up workplace harassment and discrimination closed in the spring, with feedback still being analysed, but the committee’s report calls for tighter controls to prevent inappropriate and unlawful behaviour.
- new legislation ensuring that NDAs cannot prevent “legitimate discussion” of allegations among employees, which would allow staff to gather evidence to support claims of harassment or discrimination
- the use of standard, plain English and non-derogatory language in confidentiality clauses, if they are used in settlement agreements. Such clauses should also specify what information can and cannot be shared and with whom
- strengthening corporate governance requirements to make sure employers meet their responsibilities to protect staff from discrimination and harassment
- organisations naming a senior manager at board level to oversee anti-discrimination and harassment policies and procedures and the use of NDAs
- increasing compensation for victims, to encourage organisations to tackle harassment
- increasing the time limit for bringing a claim to an employment tribunal from three months to six months and
- requiring employers to pay the costs employees encounter when seeking legal advice
While the TUC does not believe these rules will help stamp out cover-ups, employment lawyers have responded positively, welcoming clarity and the opportunity to still apply NDAs where appropriate.
In the meantime, our recommendation is that employers thoroughly investigate any claims of harassment before considering settlement agreements. Sometimes, relationships are broken beyond repair. But if you want to steer clear of accusations of a ‘gagging order’, you must face the issues raised by your employees and take appropriate action.
Source: Manuela Grossmann