Do non-disclosure agreements have a place in the era of #MeToo?
1st April 2019
The non-disclosure agreement (NDA) has recently found itself at the forefront of media and political attention in the wake of the #MeToo movement. This movement initially exposed some of Hollywood’s deepest and darkest secrets, where it gained serious traction after multiple allegations of sexual harassment and rape were made against American film producer and director Harvey Weinstein. The movement has since grown and spread to more industries and by October 2018 at least 200 powerful men had lost their jobs after allegations of sexual harassment.
What is a NDA?
The NDA, also commonly known as a gag order or confidentiality clause, is a legal contract entered into to prevent people from disclosing confidential information. They are commonly used by employers to prevent the sharing of trade secrets by former employees when they move to new employment which could very often be in a competing business. They have also been widely used in the entertainment industry, for example by the editors of the Harry Potter books and cast members of Game of Thrones. This is to ensure that information, which should be kept secret to avoid spoilers and leaks, is not released prior to the official publication. Some government guidance on NDAs can be found here: https://www.gov.uk/government/publications/non-disclosure-agreements/non-disclosure-agreements#types-of-ndas.
Are they being abused?
Recently, a controversial use of NDAs brought the issue to the forefront of public attention. It was discovered that they were often being used in an unethical manner to cover up immoral and illegal acts of sexual harassment and/or abuse, intimidation and racist behaviour. The biggest story in the UK on this issue involved the British businessman Philip Green, who has been accused of entering into five different NDAs with members of his staff to cover up a range of sexual and racial harassment complaints. One involved Philip Green paying over £1 million to a female employee who claimed that he made several unwanted advances at her, which included kissing her face, slapping her bottom and making comments about her weight. Another involved a black male employee, who received around £1 million. Philip Green is alleged to have made a comment on the man’s dreadlocks and how his problem was that he was still throwing spears in the jungle. However, the case of Philip Green is not alone. Another prominent example is that of Harvey Weinstein, where it has been reported that he entered into numerous NDAs in order to silence victims of his alleged sexual assault. Zelda Perkins is one of the women who entered into a NDA with him in exchange for a reported £250,000. She recently broke her agreement to speak out and accuse him of sexual assault. She called the agreement immoral and called for Government to take action on the regulation of these agreements.
Should NDAs be used in this way?
It is clear that the use of NDAs provides a useful benefit to society, specifically to businesses and the entertainment industry so they can keep certain information confidential to help maintain a competitive edge and avoid leaks. However, should we allow them to be used to cover up criminal behaviour? Labour MP Jess Phillips vocally came out against the use of them in this way and argued that powerful men should not be able to pressure victims into silence by using their money, power and influence. She also contemplated using Parliamentary privilege, which allows members of the House of Commons and the House of Lords to say whatever they want in Parliament without legal repercussions to name Philip Green when a court granted an injunction to protect his identity. However, it was a member of the House of Lords, Sir Peter Hain, who eventually named him by relying on Parliamentary privilege. The Equality and Human Rights Commission echoed Jess Phillips and called on Government to introduce legislation to prevent employers from sweeping sexual harassment under the carpet to protect their reputation.
What is being done and the future of the NDA?
In October 2018, Theresa May first voiced concerns over the unethical use of NDAs and announced that Government was going to look into ways to prevent this abuse of power from continuing, and to make it clear when NDAs can or cannot be enforced. Penny Mordaunt, the Minister for Women and Equalities later stated that the use of NDAs in this way was unacceptable and that the Government would ensure this ended. On 4th March 2019, the Government announced a press release to inform the public they were holding a consultation on this area of law, and how they planned to update it. There are three main proposals contained in the consultation. The first is to clarify in law that a NDA cannot stop people from reporting a crime to the police. This was arguably the case beforehand, as many lawyers have argued a NDA attempting to stop somebody from reporting a crime would likely never have stood up in court. However, even if this is true many victims may not have wanted to take the risk of a potentially long and costly legal battle, especially when there is no certainty over whether the agreement would be upheld or not. This means that the Government’s plan to formalise this and potentially make it into an Act of Parliament will hopefully provide much needed clarity on this issue. The second main proposal requires clear written advice to be given to somebody before entering into a NDA about their rights and what they can legally talk about, whether that be in an employment contract or a settlement dispute. The third main proposal plans to ensure workers who are about to sign a NDA receive independent legal advice so they are fully aware of what their rights are. This is to hopefully stop people from being tricked into signing a NDA which they were either unaware existed or weren’t fully aware of the consequences after signing it. The government consultation on these changes is open until 11:45pm on the 29th April 2019 and details of how to participate in this can be found here: https://www.gov.uk/government/consultations/confidentiality-clauses-measures-to-prevent-misuse-in-situations-of-workplace-harassment-or-discrimination.
The NDA has certainly been subject to heavy amounts of criticism over the past year, but it is important to remember the very necessary protection it provides to certain information and how that is a benefit to society. However, most, if not all people are likely to agree that they should not be able to be used as a way to cover up criminal behaviour, especially in light of the abhorrent way they have been abused by numerous powerful men. These calls for reform are likely to continue in the era of #MeToo and the growing environment of giving a voice to victims of sexual abuse who for too long have been silenced. Until the government consultation is over, we will not know exactly what legislative action they plan to take in this area; but we do know that the intended outcome addresses the major concerns many people and organisations have on the current policy of NDAs. Due to the publicity around this issue and the likely continued attention it is going to receive, it is highly probable there will be significant reform on this issue, whether or not that involves the government’s current proposals.
By Harry Naylor, a third year undergraduate LLB student at the University of Gloucestershire.