News & Insights

Dangers of non-disclosure in discrimination

We highlight the key points of a recent report regarding non-disclosure agreements.

The Women and Equalities Select Committee (WESC) has published a report addressing non-disclosure agreements (NDA) in the settlement of discrimination cases.

The report expresses concerns about the ‘widespread and commonplace’ use of NDAs to cover up allegations of unlawful discrimination or harassment rather than investigating them. The report also makes recommendations to the government which highlight the desire to reduce the use of NDAs in this context.

A key concern is that some employers are insisting on including NDAs in settlement agreements with the aim to prevent an employee from speaking about alleged behaviour, including unlawful behaviour, without those allegations ever being investigated and without any sanctions for the perpetrators.  The substantial imbalance of power between employers and employees means employees may feel they have little choice but to agree to these terms.

The report gathered evidence from victims of such behaviour and found shocking evidence relating to the detrimental effect an NDA can have on the lives of people who have suffered from abusive behaviour. The evidence presented shows how an NDA can cause psychological damage as a result of the experiences suffered as well as financial loss due to difficulties with working or finding a new job.

The WESC report aims to challenge this ‘cover up’ culture and urges employers and their legal advisers not to be complicit in using NDAs to cover up allegations of unlawful acts.

The report promotes the message that employers have a duty of care to their employees and should be cultivating a safe and harassment free working environment. Discrimination at work is unlawful and the report states that NDAs should not cover this up and that it is in the public interest that employers tackle discrimination and harassment and not hide it with legally sanctioned secrecy.

The report urges employers to settle employment disputes without the use of NDAs. The report also makes the following key recommendations:

  • ensure that NDAs cannot prevent legitimate discussion of allegations of unlawful discrimination or harassment, and stop their use to cover up allegations of unlawful discrimination;
  • require standard, plain English confidentiality, non-derogatory and similar clauses where these are used in settlement agreements, and ensure that such clauses are suitably specific about what information can and cannot be shared and with whom;
  • strengthen corporate governance requirements to require employers to meet their responsibilities to protect employees from discrimination and harassment; and
  • require named senior managers at board level or similar to oversee anti-discrimination and harassment policies and procedures and the use of NDAs in discrimination and harassment cases.

We shall keep you updated with any developments that may follow as a result of this WESC report.