#MeToo – a green light to breach NDAs?

For anyone who has been without TV, radio or wifi for the last fortnight, Sir Philip Green has been named in Parliament (and subsequently in the media) as the high-profile businessman alleged to have sexually harassed and bullied staff.

30 Oct 2018
"Colour palette book with magnifying glass.

Sir Philip, who denies the allegations, was dramatically named in Parliament after obtaining an injunction in the Court of Appeal to prevent the Telegraph newspaper printing the allegations.

Attention has focused on the role of non-disclosure agreements (NDAs). The employees who had raised grievances (and in two cases brought employment tribunal claims) alleging harassment had signed settlement agreements containing confidentiality clauses. As is standard, those clauses prevented them from discussing details of their allegations and the amounts paid under the settlement agreements, but preserved the employees' rights to make protected disclosures or report criminal activity.

From an HR perspective, therefore, the confidentiality clauses were unremarkable and lawful. The Court of Appeal seemed to agree, granting an interim injunction (in an anonymised judgment) to prevent publication of the allegations until a full trial. But after a storm of controversy, Baron Hain, a Labour peer, named Sir Philip Green as the subject of the allegations, citing concern over the use of NDAs. Parliamentary privilege means that Sir Philip has no legal redress against the peer.

Where does this leave employers looking to settle employment claims confidentially? It's worth remembering that this case is exceptional in several ways. It is unclear whether the initial leak came from one of the employees concerned and, if Baron Hain had not intervened, the media would not have been able to name Sir Philip unless the interim injunction had been lifted at trial.

The House of Commons Women and Equalities Committee has recommended that the use of NDAs/confidentiality terms in settlement agreements should be regulated more tightly. The Prime Minister also announced on 24 October that the Government would be consulting on measures to prevent abuse of NDAs. However, providing that confidentiality clauses are not unreasonably onerous and do not prevent employees from making protected disclosures, complying with legal and regulatory obligations or reporting possible criminal offences, there is currently no reason not to include them as standard in settlement agreements.

But there is a wider lesson to draw from the continuing controversy over workplace harassment and NDAs. Sweeping unacceptable or unlawful behaviour under the carpet is only ever a temporary fix. Failing to tackle it (no matter how senior or successful the perpetrator) exposes the business to serious legal and reputational risks, no matter how well-drafted the settlement agreements may be.


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