Settlement agreements are often used to resolve disputes between an employer and an employee.
They usually contain confidentiality or non-disclosure provisions which stop the employee talking about the dispute in future. The Women and Equalities Committee has published a report their concerns around the widespread use of confidentiality clauses in settling discrimination cases. They note the imbalance of power between the employer and the employee, and worry that employers use NDAs instead of tackling discrimination head on.
The Committee makes various suggestions to the government about how to tackle the issue, including:
Requiring employers to investigate all discrimination complaints even if they are settled;
Extending the time period for bringing some discrimination claims from 3 to 6 months;
Increasing the value of injury to feelings awards and introducing punitive compensation to encourage employers into doing more to prevent discrimination;
Making employers pay for the employee's legal advice on settlement agreements even if they don't then sign it;
Strengthening corporate governance requirements so companies meet their duty to protect employees from discrimination;
Appointing board level business (not HR) managers to oversee discrimination policies and the use of NDAs in discrimination cases.
NDAs have received some high-profile bad press on the back of the #MeToo movement. Many of these proposals are sensible. Discrimination is bad for business and steps which call it out will benefit businesses in the long run. However, the report fails to recognise that employers are more likely to try their luck in court if the content of settlements is not confidential. The report also glosses over the advantages to employees of avoiding long and traumatic legal proceedings. Let's hope any government changes are not purely policy driven. They must work in practice too.
