NDA Crackdown: UK Equality watchdog calls time on controversial “gagging orders”

November 14, 2019

2 min read

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What's going on here?

The Equality and Human Rights Commission (EHRC) has issued new guidance for employers regarding the use of non-disclosure agreements. The watchdog has declared that it is “calling time” on non-disclosure agreements (NDAs) being used to cover up discrimination, harassment and victimisation.

What does this mean?

In the simplest of terms, an NDA is a contract made between two or more parties that establishes a confidential relationship. NDAs are often used in employment contracts to prevent employees from sharing sensitive information about their company or their role. However, in many cases, employees have been made to sign confidentiality agreements that prevent them from making discrimination claims as part of their employment contract. 

The guidance provided by EHRC states that employees should not be asked to sign NDAs which could stop them from making discrimination claims, or even prevent them from whistleblowing or reporting criminal activity.

What's the big picture effect?

The EHRC’s tougher stance follows a parliamentary inquiry into the use of NDAs which was called following widespread concerns of them being used to chastise victims of discrimination and harassment.

The inquiry was launched in November 2018 by the Women and Equalities Committee in response to revelations that Sir Philip Green (chairman of the Arcadia Group) had paid out large sums of money in order to silence allegations of unlawful racial and sexual harassment cases made against him by staff members.

In late October this year, the government promised to bring forward legislation which will ban gagging clauses (for more information, see our article on that here). The government has also made plans to create legislation which clarifies specifically what agreements can cover. However, no timescale has been set for when this must occur by.

Ultimately, the EHRC guidance calls on employers to reconsider their practices regarding NDAs. It also prompts them to be prepared to justify their use and advises seeking legal advice if there is ever any doubt about the aptness of an NDA. Aspiring employment lawyers ought to follow the developments in this area with interest as legislative changes are likely to be forthcoming.

Report written by Juliet Majekodunmi

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