NDAs and the #metoo movement
If the last two months are anything to go by, the #MeToo movement shows no signs of abating; with allegations of sexual assault and/or harassment having been made against the superstar footballer Cristiano Ronaldo and, more recently, the British retail tycoon Sir Philip Green. This follows the furore surrounding the numerous allegations against Harvey Weinstein and the conviction of Bill Cosby.
With regard to the famous individuals listed above, it is understood that they had entered into settlement agreements with some of their accusers which included confidentiality and non-denigration provisions i.e. Non-Disclosure Agreements (NDAs). Given that we are aware of these NDAs and the allegations which led to them being entered into, clearly they did not serve their purpose.
Until recently, the Daily Telegraph was prevented from publishing the allegations of sexual and racial harassment levelled against Sir Philip Green due to there being NDAs in place. It only became public knowledge due to intervention of Lord Hain, who named Sir Philip Green in the House of Lords under the protection of parliamentary immunity. Following the Women and Equalities Committee inquiry into the Harvey Weinstein matter, the allegations against Sir Philip have brought the use of NDAs firmly back into the limelight. As a result, some are calling for the use of NDAs in an employment context to be banned completely. Further, Prime Minister May has said she will review the “unethical” use of NDAs.
The Equality of Human Rights Commission (“EHRC”) refers to the “pervasiveness” of sexual harassment in the workplace in its report entitled: “Turning the tables – Ending sexual harassment at work”. The EHRC has put forward a number of recommendations in its report on how to address this such as the introduction of: (i) new legislation to make contractual clauses preventing the disclosure of future acts of discrimination, harassment or victimisation void; and (ii) a statutory code of practice on sexual harassment in the workplace.
As shown by the mass Google walkout which occurred a few days ago, there is a need to review how sexual harassment in the workplace is addressed. Clearly, this will include a review of the use of NDAs in such circumstances. While I agree that such a review is required, I contend that it is necessary for Parliament to consider the potential negative implications there could be in limiting the use and/or effect of NDAs in cases involving harassment or discrimination before introducing any new legislation. I have acted for both sides where allegations of harassment or discrimination have been made. Mutual confidentiality and non-denigration provisions are often a key consideration for both parties. If employers have no confidence in a settlement agreement providing them with the certainty that allegations of sexual harassment will be kept confidential, they may simply decide its best to defend such allegations. This is particularly so, given that the reputational damage may be less than if details of a commercial deal are later leaked. For example, Sir Philip has denied any wrongdoing, and claims that he only engaged in banter with staff. He may now be of the view that it would have been better if he had not entered into settlement agreements as their mere existence raises a presumption of guilt.
Should NDAs be prohibited in the employment sphere, I suspect that this will lead to much more litigation. However, many individuals cannot afford legal fees and statistics show that individuals who seek to bring claims without legal representation tend to be unsuccessful. It also needs to be noted that discrimination claims are notoriously difficult to prove. Further, it should be noted that raising allegations of harassment and discrimination is taxing emotionally as well as financially. Where I have acted for clients who have done so, they have all remarked about the damage caused to their health and confidence. As such, undermining the validity of confidentiality provisions in settlement agreements/NDAs or removing them entirely, may have the unintended consequence of making things worse for the victims of sexual harassment who want to settle matters and move on with their lives. Therefore, it would be remiss for Parliament not to take this into consideration.