NDAs in the age of #MeToo and Time’s Up

Anna Elliott, Partner, Osborne Clarke

Anna Elliott, Partner, Osborne Clarke

Written by Anna Elliott, Partner, Osborne Clarke

Following the latest round of gender pay reporting, the wider challenges around diversity and harassment in the workplace have continued to hit the headlines.

The #MeToo and Time’s Up movements have exposed a culture of endemic harassment in many workplaces and there is a renewed focus on these issues in parliament.

Employees and stakeholders increasingly expect businesses to take a stance. But while the risk of Employment Tribunal claims arising from unacceptable workplace behaviour is not new, the increasing scrutiny of other arrangements which may be used to mask such behaviour is something which employers must now deal with.

Chief among these are non-disclosure provisions in settlement arrangements being used to silence victims of sexual harassment. And while there is no suggestion among MPs and regulators of banning these non-disclosure agreements from employer and employee arrangements, clear boundaries are being established as to how far they should go.

Recent guidance from the Law Society sets out some key points in regard to NDAs for employers to take on board:
• The extent of the NDA – exceptions should be made to an NDA to ensure that it does not prevent an individual from making certain disclosures.
• A limit on any restrictions – where any exceptions are subject to some form of restriction, any limits imposed must be very carefully considered.
• Easily understood by all parties – an NDA must be drafted in clear simple English and it is good practice to give anyone signing an NDA clause time to consider the implications and if necessary, take legal advice.

Achieving a balance in your settlement terms in key. Employers and their legal advisers need to ensure that they carefully balance the wish to draw a line under an acrimonious or sensitive dispute against the need to do so in a way that does not cross the line from a regulatory and legal perspective.

This doesn’t rule out using NDAs as a practical and long-standing way of settling workplace disputes for employers and employees.

So what should employers be doing now?

• Review your NDA/confidentiality provisions – ensure any NDA or other confidentiality terms reflect the guidance outlined above and are drafted in a way which can be easily understood.
• Review other provisions which may act as an NDA – check that other provisions in your agreement, such as repayment or indemnity clauses, do not form an indirect barrier to reports or disclosures which would otherwise be notifiable to, for example, the police or a regulator.
• Ensure line managers and HR are aware of the issues – make them aware of the limitations on NDAs and where there is an in-house legal function, obtain sign-off.
• Address risks of potential claims and behaviour occurring – employers will be held liable for acts carried out by employees, unless they can demonstrate that reasonable steps were taken to prevent them. To assist with this defence and minimise the risks highlighted by the #MeToo movement, employers should review and implement effective policies, conduct workplace training, support staff and ensure such issues are not condoned or perpetrated, and foster a zero-tolerance culture for sexual harassment.
• Watch out for further developments – the government plans to issue a new statutory Code of Practice on Sexual Harassment and is consulting on proposals including the better regulation of NDAs.

Ultimately, businesses must ensure they implement clear policies around non-disclosure agreements and provide good training in order to give themselves the best defence against any potential problems – and if these do arise, ensure they deal with any complaints effectively.

Osborne Clarke and PES are holding a “7 Steps To Happy Employees” seminar in London on Thursday, 12th September. The event will highlight evidence-based ideas for workplace wellbeing and is aimed at HR directors in professional services firms with 50-1,500 employees.

The event takes place at Osborne Clarke’s offices at One London Wall, The Barbican, from 9am-12pm.

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