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Shining a light on sexual harassment in the workplace

Posted on 02 December 2019

Is there a future for NDAs in a post #metoo landscape?

As a result of the Weinstein sexual harassment scandal and subsequent #metoo movement, a spotlight has been shone on sexual harassment and discrimination in the work place.

Confidentiality clauses (often referred to as non-disclosure agreements) are routinely used when a settlement is reached with a departing employee who has raised complaints prior to their exit. Sometimes, as a quid pro quo for settlement monies, employers seek the comfort of knowing that the ex-employee cannot disclose the terms of their settlement or continue to air complaints that the employer may vehemently deny.  Without this comfort, many argue that employers will be less inclined to settle as they will not be able to properly defend themselves against such allegations – potentially resulting in litigation that could have been avoided.

There has been an increasing focus on the use and, more importantly, the misuse of such clauses in situations of workplace harassment or discrimination.  

Earlier this year, the Women and Equalities Select Committee (WESC) published a report on the use of NDAs. This report raised no less than forty-five recommendations for the government in relation to the misuse of NDAs in discrimination cases. These recommendations included potentially onerous reporting requirements and extended beyond the scope of NDAs. The report also raised concerns that employers have tended to avoid tackling and preventing future harassment and victimisation and have instead used their time and resources to put pressure on employees to walk away from allegations.

The government published its full response to the WESC's report on 29 October 2019. This response, coupled with its response to its own consultation on NDAs, sets the stage for how NDAs – as well as harassment and discrimination issues more generally - will be viewed going forward.

The government stressed that it believes that there is a legitimate place for such agreements in both employment contracts and settlement agreements. However, it agreed with the Committee that employers' use of NDAs in a bid to cover up cases of sexual harassment and discrimination in the workplace is unacceptable. It stressed that using NDAs as a tool to "silence and intimidate victims of harassment and discrimination cannot be tolerated", and it is clear from its commitments to introduce legislation that the landscape is changing.

Here, we consider the potential effect of this response on NDAs going forward, and other significant proposals and measures relating to discrimination that are in the pipeline, including a move to clamp down on repeat offences and the reintroduction of liability on employers for third party harassment.

Legislative Proposals

Non-disclosure agreements

The government has committed to a number of measures which to seek to "strike the right balance between continuing to allow the legitimate use of NDAs and preventing their misuse", which will undoubtedly change the way in which organisations approach NDAs going forwards. The key measures, which are likely to affect recruitment businesses going forward, are set out below. 

Other measures

Potential further changes on the horizon

In addition to the above, further changes could be on the horizon as some of the WESC's recommendations have essentially been 'parked', pending the outcome of another ongoing consultation by the government, and will be returned to in due course. These include:

What does this mean for your business?

Senior management must be made aware of any concerns that employees may have with systematic issues and should take steps to stamp out a culture that silences victims whilst leaving harassment or discrimination issues to fester. Whilst the vast majority of organisations will not have a culture of discrimination, the government has drawn a clear line in the sand that repeated wrongdoing or improper behaviour will not be tolerated going forward.

It is more important than ever that allegations are seriously investigated, and any perpetrators are sufficiently sanctioned. The government has made clear that it is committed to looking into positive interventions to help prevent and better monitor cases, without jeopardising the use of NDAs where victims would find them of benefit. Employers would be well advised to take a proactive approach to these issues now – if they haven’t already started doing so - in order to prepare for the new legislation, and to avoid any reputational damage caused by getting this wrong.

Whilst NDAs still have their place, thought should be given as to the wording, and automatic inclusion, of NDAs, and even more attention should be focussed on dealing with any underlying concerns - extending to third parties.

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