Non-disclosure agreements are “widely used to silence victims of sexual harassment in the workplace”, according to Parliament’s Women and Equalities Committee.
Publishing its findings after a five-month inquiry – one of two launched in the aftermath of the #MeToo movement – the Committee described the current use of ‘gagging clauses’ as “unethical” and “potentially unlawful”.
‘Gagging Clauses’
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Non-disclosure agreements (NDAs) are contracts that restrict what a person can say, or who they can tell, about something. These restrictions – dubbed “gagging clauses” – often appear in employment contracts and are a common feature of settlement agreements, which are used to resolve legal disputes outside court.
NDAs can serve a legitimate purpose, like protecting a business’ trade secrets, but they are being used “to prevent damaging stories about sexual harassment from surfacing”, reports the Committee. Several high-profile cases have brought this issue to the fore.
During the Presidents Club scandal in January 2018, it emerged that the hostesses were, upon arrival, presented with a five-page NDA, intended to shroud the evening’s events in secrecy. The women were reportedly not given time to read the NDA or take a copy away.
Signatories too ill-informed and intimidated to question them
Then there’s the case of Zelda Perkins, a colleague to one of Harvey Weinstein’s alleged victims. Perkins claims that the NDA that accompanied her settlement agreement with Weinstein was signed under a “siege mentality” imposed by his lawyers. The agreement sought to impose limitations on what Perkins could say in any future criminal investigation.
Given the coercive circumstances surrounding these NDAs, and their overreaching scope, their legal validity is questionable. However, as the Law Society told the Committee, “it’s unlikely…the legality…would be tested”, with signatories too ill-informed and intimidated to question them.
Cleaning Up The Use Of NDAs
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To curb the misuse of NDAs, the Committee has asked the Government to pass a law requiring the use of standardised confidentiality clauses.
Currently, many NDAs contain a hidden caveat, to the effect that nothing in the agreement prevents the making of disclosures permitted by law. The Committee thinks this should be written in plain English, so that people understand their rights to blow the whistle on wrongdoing and to report a criminal offence committed in the workplace – rights that trump the terms of NDAs.
The Committee also recommended making whistleblowing laws clearer and wider in scope, to ensure disclosures about sexual harassment made to the police, professional regulators and the courts are definitely protected.
In an acknowledgement that lawyers have been complicit in the misuse of NDAs, the Committee has asked the Government to make it an offence for them to include unenforceable clauses designed to obscure a person’s rights.
Ethics For All vs Justice For One?
Employment lawyers were invited to give evidence to the Committee. Many said that a heavy clamp down on NDAs would simply result in fewer settlements – meaning victims of sexual harassment will instead have to endure protracted, public and costly court hearings against their employer.
However, according to campaigners, the ‘chilling effect’ that follows the use of NDAs exacerbates the problem. By concealing sexual harassment in the workplace, it protects perpetrators and legitimises conduct that violates the human rights of victims.
To resolve this dilemma, the Committee has recommended changes beyond regulating the use of NDAs. It wants tribunal hearings to be less off-putting to victims and has therefore asked the government to give greater protections to claimants – such as lifelong anonymity in more serious cases – and for judges to make wider use of cost orders, so that employers who lose a sexual harassment claim will have to pay employees’ costs.
‘Top of the Agenda’
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Overall, the Committee found that the Government, professional regulators and employers are failing to tackle “widespread” sexual harassment in the workplace.
This not only undermines victims’ right to privacy (Article 8 of the Human Rights Convention), which encompasses a person’s physical and psychological integrity, but it amounts to sex discrimination, which is prohibited under the Human Rights Convention (Article 14) and other international treaties like the Convention on the Elimination of All Forms of Discrimination Against Women.
Acknowledging this, the Committee said: “It’s time…to put sexual harassment at the top of the agenda.” It has therefore called for a new law to be passed, imposing a duty on employers to protect workers – including interns – from sexual harassment, whether by colleagues or clients. If not adhered to, employers would face enforcement action by the Equality and Human Rights Commission, including “substantial” fines.
Professional regulators – the likes of Ofsted, the Solicitors Regulation Authority and the Financial Conduct Authority – will also be expected to intervene.
