The government has published a consultation on proposals to tighten up the rules around non-disclosure agreements (NDAs) and confidentiality clauses in the employment context.
The consultation is a response to the increasing evidence in recent months of the ways in which some employers have used these agreements and clauses to indicate that victims of harassment cannot make any disclosures, thereby intimidating them into silence despite having suffered incidents involving sexual assault, physical threats and overt racism.
Although legal protections already exist, the aim of the consultation is to ascertain views on what further limitations might be put on confidentiality clauses, to ensure they cannot be misused or to clarify what they can and cannot cover.
In particular, the government proposes to legislate to ensure that no confidentiality clause can prevent a person making any disclosure to the police. This will make it clear that, regardless of what the clause says, a victim can discuss a matter with the police or report a crime without fear of reprisal.
However, the government has also recognised that confidentiality clauses can be approached unethically and drafted in such a way as to hide from workers or victims their rights and protections and intimidate them from making any kind of disclosure to anyone. To combat this, it is proposing that confidentiality clauses clearly set out their limitations, either in settlement agreements or as part of a written statement of particulars.
As part of this increased protection, the government is also proposing to extend the current requirement for a worker to receive independent advice to include advice that relates specifically to any confidentiality provisions within the agreement, as well as its limitations.
Finally, the consultation asks how best to enforce the proposed requirement on wording of confidentiality clauses and proposes separate mechanisms for settlement agreements and the written statement of particulars. The government proposes that any confidentiality clause in a settlement agreement that does not meet new wording requirements is made void in its entirety.
Iain Birrell, of Thompsons Solicitors, said: "Popularly known as ‘gagging clauses’ these agreements seek to hide things from the public gaze. This is not sinister per se but it certainly can be. These agreements have been a cause celebre since Harvey Weinstein inadvertently spawned the #Metoo movement and the Presidents Club scandal of young women employed as hostesses and waitresses at an all-male dinner who were obliged to sign NDAs that were intended to prevent them from talking about groping and other harassment by paying guests. What gets lost in the outrage is that sometimes individuals want them too; preferring to protect their privacy and thereby avoid intimate information being used to profit the tattle-merchants. Similarly the wish to protect trade secrets is a legitimate one in business. A balance therefore needs to be struck between the legitimate and the exploitative, and the question is ‘how?’
"This consultation has some interesting ideas on that question, in particular making the NDA clause void if the right wording is not used. Others are re-packaging what already exists, such as always being able to go to the police. What it doesn’t really address is the fact that abuses usually occur because the employer holds all the bargaining power and the resource. They dictate the terms. They write the agreement. Even clauses which are currently legally unenforceable usually stay in NDAs in order to scare employees into compliance anyway. Recently the Solicitors Regulation Authority issued a notice warning solicitors that NDA abuses were professional misconduct, and the Law Society also issued similar guidance. A multi-stranded approach is underway, but ultimately it will still need either a solicitor or an individual to stand up to employer abuse and ambition in circumstances where governmental vandalism of the justice system makes that harder than ever."
The consultation ends on 29 April. The consultation document can be found on the government website.