Legislating NDAs

13th March ‘19

After the #metoo campaign and high-profile cases relating to Harvey Weinstein and Philip Green’s conduct, the wind is now firmly behind a movement to legislate Non-Disclosure Agreements (NDAs).

Last week the government indicated that legislation will be invoked to prevent employers from using confidentiality clauses to cover up their misgivings and intimidating victims of harassment to keep their silence. The announcement coincided with the resignation of the Chief Executive of fashion chain, Ted Baker, following allegations of misconduct.

Business minister Kelly Tolhurst urged for the need for measures to be put in place to prevent employers from manipulating the system and enabling them to keep matters from being reported to the police or relevant regulators.

NDAs do certainly serve a legitimate business purpose as they protect publication of sensitive information and they assist in resolving disputes without recourse to the Court. However, it is clear matters have been taken a step too far and NDAs are being abused to the point of being unethical. Tolhurst commented that:

‘There is increasing evidence that confidentiality clauses are being abused by a minority of employers to intimidate victims [and] conceal harassment and discrimination in the workplace – including sexual assault, physical threats and racism. This is unacceptable’.

The consultation is taking place with workers, employers and legal advisers and closes on 29 April 2019.

The proposals put to consultation include:

  1. Clarifying the law so that disclosures to the police cannot be prevented by an NDA.
  2. Requiring a clear, written description of a person’s rights and the limits of any confidentiality clause before an NDA is signed.
  3. Requirement for a worker signing an NDA to have independent legal advice to specifically include advice on the limits of any confidentiality clause.

The government also proposes that any such confidentiality clause that does not meet the new wording requirements be void in its entirety.

The recent debate and examination of NDAs has also focused our minds on those that draft them and has called into question the responsibility of solicitors in this regard. It is crucial that we as professionals balance the interests of our clients together with the protection of the public and its interests. Whilst NDAs can serve a genuine purpose they should not be misused as a manipulative tool to silence victims of harassment or any other abuse.

This paper is intended to be a brief note for clients and other interested parties. The information is believed to be correct at the date of publication but should not be relied upon as a substitute for professional advice. Please speak to a member of our team.

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