In response to the #Metoo movement and scandals like the Presidents Club the government are consulting on limiting the use of confidentiality clauses – also known as non-disclosure agreements in sexual and racial harassment cases.
The Government’s announcement to Parliament on Monday (March 4) made it clear that non-disclosure agreements (NDAs) have their legitimate uses, for example an NDA is standard practice when an employee and employer settle an employment dispute. It is also legitimate for businesses to want to protect trade secrets. Nevertheless these agreements cannot be used to shield wrongdoing: this is against the law.
The whistleblowing law- the Public Interest Disclosure Act- ‘trumps’ any part of an NDA which tries to block public interest information from being concealed. In effect, unlawful or criminal conduct cannot be hidden by an NDA.
But the problem is, not many people are aware of this. A worrying minority of employers have banked on this lack of knowledge and nonetheless abused such agreements by putting in draconian confidentiality clauses that are unlikely to be enforced in court, hoping that a whistleblower or victim will be in the dark.
This lack of legal know how and a belief that they cannot escalate their concerns prevents the whistleblower going to the Police or the press. This seems to have been the case of both the Presidents Club and the treatment of Zelda Perkins in relation to allegations of rape and sexual assault against Harvey Weinstein.
The Government announced the following key proposals that they believe will create ‘a more level playing field between workers and employers, providing more understanding over rights and legal responsibilities’:
- Legislating that confidentiality clauses cannot prevent any disclosure to the police
- Requiring a clear description of the limits of confidentiality provisions within a written statement of employment particulars (in the case of confidentiality clauses in employment contracts) or within settlement agreements
- Extending the law that means a worker agreeing to a settlement agreement receives independent advice, by specifying that the advice must cover the limits of any confidentiality clauses in the settlement agreement.
Anything that clarifies victim and whistleblowers rights is a good thing – but the response outside government so far has been a chorus of “this doesn’t go far enough” and described by one political pundit as a “public information campaign”. Protect’s view is the government proposals will better inform workers of their existing rights but it doesn’t go far to alter the system itself. It doesn’t clarify the tricky issue of when harassment or discrimination can be disclosed, and it doesn’t address the individualised approach to dealing with workplace discrimination. Protect believes these proposals are a good starting point, but far from the final conclusion.
The #Metoo movement has been founded on individuals speaking out and finding they are not alone in voicing their concerns. This is the dilemma facing the whistleblower – how do they know their concern is a one-off incident, or indicative of a wider problem. All the time an individual can be “silenced” through a legitimate NDA, the problem remains.
Some may suggest that discrimination (of any kind – not just sexism) meets the public interest test. At present, what is the public interest is a matter for tribunals to decide. A single case of discrimination may not meet the “public interest” test for disclosure– but the rules are not hard and fast – a tribunal needs to ask: what is the nature of the wrongdoing, the interests affected, the identity of the wrongdoer, the numbers involved? Too many uncertainties and the individual is effectively silenced. Worse, the employee risks the employer pursuing them through the courts for a breach of confidence if they speak up (to which there is little comfort in a response that the remedy lies in the employment tribunal). Some commentators have suggested that there should be a public interest defence in the courts to a breach of confidence claim – but the uncertainties about what is the public interest remain.
Suppose the government clarified when it is in the public interest to report discrimination. The next question is to whom? Clearly the police are not the appropriate body to take action over an unlawful breach of an employment contract. Even if they welcome the intelligence, we need to manage expectations that allowing people to report to the police will result in action. Is it time for regulators to step up? Some like the FCA recognize that discrimination may be relevant in their assessment of fit and proper persons. The Kark review in the NHS also examines what standards should be expected of senior managers. But many industries are unregulated and, as a result, there is no external body to “join the dots” and identify wider workplace concerns. As the Equality and Human Rights Commission prepares to join the list of prescribed regulators, is it time for them to take on this role?
From Protect’s point of view we hope through the public consultation to persuade the Government to widen reforms of all whistleblowing situations and add the following to their announced proposals:
- Section 43J should be amended with more robust language. We suggest the following wording: “no agreement made before, during or after employment, between a worker and an employer may preclude a worker from making a protected disclosure.”
- We agree with the consultation proposal that there should be a requirement on lawyers when advising on settlement agreements (see S203 (3) ERA) to explain the meaning and effect of 43J PIDA (and any additional anti-gagging provisions brought forward by the government).
- To publicise and underpin fresh guidance there should be a public awareness campaign around workers’ rights under PIDA as well as anti-discrimination law in the Equality Act.
- Widening the ban: While we do not support the outright ban of NDAs, we do not think it would ever be appropriate to use an NDA to prevent the disclosure of an unlawful act that has not yet taken place. We would also like to ensure that other clauses in settlement agreements (such as warranties or non-disparagement clauses) are not used to circumvent the anti-gagging provisions in PIDA (or other soon to be proposed anti-gagging provisions).
- Give a greater role to Equality and Human Rights Commission (EHRC) in enforcement of harassment and discrimination: we are concerned the current proposals will not cover situations where sexual and racial harassment/discrimination falls below the level of criminal activity, meaning the police would not be able to investigate. In this situation a whistleblower would have the right to raise their concerns, even with an NDA in place but with no external body or regulator that could take the concerns.
- Stronger duties on employers: we back the Women’s and Equalities Select Committee’s proposals to create a positive legal duty on employers to prevent harassment with a breach of this duty enforced by the Equality and Human Rights Commission. This, combined with the Government proposals to ban agreements that prevent disclosures being made to the police, could really rebalance the power between workers and employers.