Fri 14 Jun 2019

Non-disclosure agreements in cases of discrimination

The Women and Equalities Committee has published its report on the use of non-disclosure agreements in discrimination cases.

The Women and Equalities Committee launched an inquiry into the use of non-disclosure agreements in workplace discrimination cases in late 2018.  The inquiry has now been completed and the report published on 11 June, highlights on going concerns not only with the use of NDAs but also the difficulties faced by victims who choose to proceed to an employment tribunal.

Concerns relating to the use of NDAs included employers using, for example, job references as bargaining tools to ensure allegations of unlawful discrimination were kept secret. This secrecy, in turn, meant that employers could avoid having to investigate allegations or deal with perpetrators.  For those that did proceed to tribunal, the evidence showed online publication of tribunal judgements had increased the risk of claimants being blacklisted by future employers, with it being suggested that ethnic minorities are disproportionately disadvantaged.  This is a significant barrier to potential claimants bringing discrimination claims. 

The report includes a significant number of recommendations relating to both the use of NDAs and the employment tribunal process.  The report recommends that the UK Government:-

  • legislates to ensure NDAs cannot prevent legitimate discussion of allegations of unlawful harassment and discrimination;
  • legislates to ensure NDAs cannot prevent signatories from sharing information helpful to a claim by another employee;
  • requires employers to cover the costs of the employee's legal advice whether or not a settlement agreement is signed;
  • considers requiring employers to investigate all discrimination and harassment claims irrespective of whether a settlement is reached with the complainant;
  • introduces legislation to require employers to provide a reference, removing this as a potential bargaining chip in negotiations;
  • legislates to ensure any clause which controls what information an employee can share is clear and specific, explains the effect of such clauses and their limits and confirms what wording can be used, for example in job interviews;
  • strengthens corporate governance requirements on companies to include appointing a named senior manager at board level or similar to oversee (i) anti-discrimination and harassment policies and procedures and (ii) the use of NDAs in discrimination and harassment cases.

With regard to the employment tribunal system, the report recommendations include:-

  • extending the time limit for lodging employment tribunal claims relating to sexual harassment, pregnancy or maternity discrimination to 6 months;
  • altering the remedies available in tribunals to include punitive damages, requiring the employer to pay the employee's costs when they lose a sexual harassment claim and increasing the injury to feelings awards (Vento bands) currently available.

In the long run, the way to address the misuse of NDAs in these situations is for employers to remove the need for them in the first place.  Provision of training to staff and management on harassment and discrimination is beneficial in achieving that aim (as well as potentially forming part of an employer's defence to a tribunal claim) and the report recommends the introduction of a mandatory duty on employers to protect workers from harassment and discrimination in the workplace.  It also recommends that the UK Government considers requiring employers to collect data and report annually on (1) the number and type of discrimination and harassment claims that have been made within their organisation and the outcome of such complaints, and (2) the number of settlement agreements containing confidentiality, non-derogatory or similar clauses they have agreed and the type of dispute they relate to.  This would seem to go some way towards stopping NDAs being used by some employers to brush incidences of harassment under the carpet. 

By way of a further update, the UK Government consulted on measures to prevent the misuse of confidentiality clauses in situations of workplace harassment or discrimination and is currently analysing the feedback. 

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