NDAs now commonplace in employment disputes, parliamentary committee hears

Concerns over ‘chilling effect’ on justice – but experts caution against outright ban

NDAs now commonplace in employment disputes, parliamentary committee hears

The use of non-disclosure agreements (NDAs) is now commonplace across a range of employment disputes, a parliament select committee has heard, fuelling concerns that such arrangements are allowing damaging and discriminatory behaviour to flourish in the workplace.

Giving evidence to the Women and equalities committee (WEC) yesterday, Kiran Daurka, partner at Leigh Day and member of the Discrimination Law Association, said her experience suggested the use of NDAs was common “across any dispute within employment”, not just in cases of discrimination. 

“It could be a collective redundancy, it could be anything,” Daurka said.

Daurka added the terms of NDAs had also become “more onerous” over time. While once an NDA may have just covered the terms of a settlement, they are now being used to make confidential the fact a settlement has even been agreed in the first place.

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The WEC was hearing evidence as part of its ongoing investigation into the use of NDAs in cases of harassment and discrimination.

NDAs, also known as confidentiality clauses, create a legal obligation to privacy and compel those who agree them to keep specified information confidential. They are often used in settlement agreements with departing employees to ensure confidential or commercially sensitive information is not shared. However, their use in cases of harassment and discrimination has become increasingly controversial in recent years.

Daurka told the WEC that over the last six to seven years it had become almost standard to see confidentiality agreements used to cover the circumstances surrounding a termination or leading up a settlement agreement.

While Daurka conceded NDAs could offered a “huge benefit” for clients who wanted to settle their cases and move on “in a way they would not be able to without a confidentiality agreement”, she warned the uptick in their use has had an “increasingly chilling effect” on women being able to speak out.

Also giving evidence to the WEC, Baroness Helena Kennedy, director of the International Bar Association Human Rights Institute, attributed the increase in NDA use to lawyers looking “very creatively” at the law to get the best deal for their client. 

Kennedy cautioned against an outright ban on the use of NDAs in harassment and discrimination cases because in many cases women also wanted to use confidentiality clauses. “[A ban] becomes problematic because so many women would prefer to deal with [disputes] this way,” she said, adding there was “a place for NDAs” in protecting intellectual property or trade secrets.

However, Kennedy, who advised Zelda Perkins on the use of NDAs in her case against her former boss, Harvey Weinstein, cautioned many women “do not find [an NDA] the release they thought it was going to be… if it’s been a serious assault”.

She also called for greater investigation into the regulation of the legal profession and the role of the Equality and Human Rights Commission (EHRC) in investigating patterns of harassment and their link to NDAs.

The WEC is running a separate inquiry into the role of the EHRC in enforcing the Equality Act, where it heard most settled employment tribunal cases now involve the use of NDAs.

Nick Whittingham, chief executive of Kirklees Citizens Advice and Law Centre, told the inquiry around 80 per cent of settled matters involved an NDA, suggesting their use is more widespread than previously thought.

The government announced in December it wanted to introduce a new statutory code of practice to tackle sexual harassment in the workplace. But Maria Miller, MP and chair of the WEC, said the government had “missed the opportunity to place a greater onus on employers to protect workers from harassment”.

The deadline for responses and evidence in the NDAs inquiry is 31 January.