Just how far is the Government prepared to go to prevent businesses using non-disclosure agreements to stop any dirty laundry being aired in public?
That is the question being asked by a legal expert, following today’s release of a major report into the use of the agreements, more commonly known as NDAs, by employers in cases of alleged discrimination.
Commissioned in the wake of a number of high-profile sexual discrimination and harassment cases, The Women & Equalities Committee of the House of Commons has produced its paper on the Use of Non-Disclosure Agreements in Discrimination Cases.
Its contents include a series of measures that, if implemented, are designed to halt the practice of organisations using NDAs as a way of keeping any claims of sexual harassment or discrimination under wraps.
The highly-publicised #MeToo campaign has brought this issue to the fore – highlighting the potentially damaging impact of using NDAs to stop such information being made public.
Of course, says Wilkin Chapman employment specialist Tom Martin, there are perfectly acceptable reasons why many companies use NDAs and it is a question of balance.
“Non-Disclosure Agreements, which require individuals to keep certain information confidential, are a common way of a business protecting its commercial interests or reputation. Such agreements can be used legitimately, for example within settlement agreements, however they are coming under increasing levels of scrutiny,” explains Tom.
Today’s report, says Tom, tries to address what it sees as an inequality in bargaining power between employees and employers. The report suggests that this present imbalance has led to individuals signing NDAs to settle discrimination and harassment disputes to avoid the pressure and cost of bringing a claim before an Employment Tribunal.
As part of these agreements, the report adds, ‘secrecy about allegations of unlawful discrimination [is] being traded for things that employers should be providing as a matter of course’.
Key recommendations, which the Committee says will help to prevent this include:
Time limits to bring discrimination claims to be extended from three to six months, particularly in cases of sexual harassment and/or pregnancy and maternity discrimination;
A wide review of the Employment Tribunal procedure to be undertaken, including Legal Aid, funding and assistance for litigants in person, the available remedies, and the costs regime in order to “reduce disincentives to taking a case forward”;
Recognition that refusal to agree to an NDA should never, in itself, be deemed to be an unreasonable refusal to settle a claim; and
Legal contributions towards advice on any settlement agreement being paid by the employer, regardless of whether or not the agreement is signed.
Tom adds: “There is clearly a balance to be struck between allowing allegations of discrimination and harassment to come to light and be properly investigated and allowing litigants to legitimately settle disputes out of Court under a settlement agreement.
“Both of these issues are important in their own right, but there is a particularly difficult balance to strike between them, as many employers will not settle a dispute without a guarantee of confidentiality. It remains to be seen how far the Government may go in implementing the recommendations of the report to try and find the right balance.”
For advice on any employment issues, Tom can be contacted by email firstname.lastname@example.org