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NDA or not?

At the conclusion of a mediation or settlement meeting the parties will often suggest a confidentiality agreement and of course mediation itself is confidential. They are common in commercial cases, for example regarding restrictive covenants. However, their use in an employment context is becoming increasingly controversial and in some ways NDAs are becoming self defeating. They may soon be outlawed in employment cases, or be deemed to be unenforceable. At the end of the day requiring an NDA can be seen as unethical and highlighting wrongdoing and a power imbalance.

The Telegraph argues that “there is a clear public interest in telling people whether a prospective employer has been accused of abuse. And for all we know, there may be people out there who have been victims of criminal offences at work but who don’t believe they can complain to the police because they’ve signed NDAs.
The courts, for one reason or another, have not been able to resolve this issue. All those who were subject to NDAs after complaining of sexual misconduct and racial abuse remain subject to NDAs.”

In the months since the Harvey Weinstein story broke and the #MeToo movement exploded, followed by the Philip Green case there has been a growing awareness of the use of non-disclosure agreements (NDAs), in some cases, to gag victims of sexual assault, or buy their silence, preventing them from going public with their stories, or even sharing information with colleagues and acquaintances. Many people, however, remain unaware of the extensive use of such agreements to silence women who have experienced maternity discrimination. In the case of Philip Green, he spent £3m in legal costs defending an NDA from being overturned and the Telegraph publishing details of alleged activity he wanted to hide.

We know that such discrimination is rife in the UK: an Equality and Human Rights Commission report estimated in 2015 that 54,000 women a year lose their jobs as a result. But the full picture may be masked by the widespread abuse of NDAs.

It may be very well to use a confidentiality clause in a commercial settlement of a dispute but when it is designed to prevent details of negligence or criminal activity being disclosed, surely the Courts should refuse to uphold them, just as restrictive employment contracts can be ruled to be invalid? The question is where do you draw the line? When is an interest legitimate enough to justify someone being prevented from speaking about it?