Time to Talk about NDAs

March 20, 2019

Category:

NDA

2 min read

Sign up to our mailing list! 👇

What's going on here?

The government is planning to reform non-disclosure agreements (NDAs) to stop them from being used to prevent employees and whistle-blowers from reporting abuse.

What does this mean?

Kelly Tolhurst MP (a Parliament business minister) has announced that the government is planning to reform the use of non-disclosure agreements by employers, following a number of high-profile cases of their abuse. The most notable cases are those of Sir Phillip Green and Harvey Weinstein, who are alleged to have used the clauses to prevent employees from speaking out about sexual assaults. The clauses are often signed as part of settlements where the employer pays compensation in return for the employee signing.

The changes will ensure that employees who have signed them can still report crimes or sexual harassment to the police. There are also plans to ensure that any employees who sign these agreements have access to independent legal advice to ensure they are aware of these new rules.

What's the big picture effect?

Non-disclosure agreements are very common and are used by a huge range of organisations to protect confidential information. The agreements form an important part of our legal system, by making it easy for organisations to hold employees accountable for sharing confidential information. These changes are clearly aimed at addressing NDA abuse and are not intended to prevent companies from exercising their legitimate use (in protecting trade secrets and intellectual property).

Some have criticised the proposed reforms, such as Maria Miller MP (the Chair of the Women and Equalities Committee) who has said that the proposals amount to little more than reiterating the existing law. This has been echoed by lawyers in the field who have said that agreements preventing employees from going to the police would be unlikely to hold up if challenged, even now. A key thing to note, however, is that this will encourage people to come forward as it gives employees confidence that they will not face legal action from their employer. The suggested independent legal advice will also help to encourage people to come forward and report abuse. This would have been helpful in many cases, like that of Zelda Perkins. Perkins, a former assistant to Harvey Weinstein, broke her NDA in 2017 to speak out and testify before parliament, waiting almost 20 years after the event as she feared repercussions. 

As mentioned, NDAs are hugely important in every business for legitimate reasons. Ann Brevitt (head of employment at law firm Cooley) has said that ‘NDAs are both necessary, and if drafted properly, acceptable’. This reiterates the significance of the agreements in the course of regular business. Therefore, it is important for the new reform to strike a balance between the interests of employees and the interests of companies.

Report written by Harry B

If you’d like to write for LittleLaw, click here!

Share this now!

Check out our recent reports!