The use of non-disclosure agreements in discrimination cases Contents


140.Discrimination at work is unlawful under the 2010 Equality Act and employers have a duty of care to provide a safe place of work for their employees. It is hard to understand on what basis it could ever be deemed to be in the public interest for employers to use legal agreements, often drawn up by professionally qualified lawyers, HR and trade union professionals, to cover up allegations of unlawful and sometimes criminal behaviour committed in the employer’s organisation. It is difficult to think of any other aspect of business or service delivery where this would be seen as business as usual. This ingrained behaviour has to be vigorously challenged.

141.It is clearly in the public interest to ensure that allegations of law-breaking are investigated wherever they occur and are not covered up by legally sanctioned secrecy. This is no less so for allegations of unlawful discrimination.

142.The Government needs to consider its duty to ensure that effective mechanisms are in place to enforce the law and to ensure that employees can assert their legal rights. At the very least, the Government has to reset the parameters within which NDAs can be used when there are allegations of unlawful discrimination. And the direction of travel has to be to stop the use of NDAs to cover up allegations of unlawful discrimination whilst protecting the rights of victims to move on. It must also as take urgent action to address the failure of the employment tribunal system to offer very vulnerable employees who have experienced discrimination any meaningful route of legal redress.

143.We have been particularly struck by the evidence we have heard that NDAs are used so routinely when settling discrimination and harassment cases—and other employment disputes—that many employers and lawyers believe them to be integral to settlement agreements. As a result, individuals who wish to settle discrimination cases are routinely advised that they cannot expect to settle without agreeing to some confidentiality. McAllister Olivarius has suggested that the use of NDAs has become a habit that is hard to break and has outlined some of the difficulties its lawyers have experienced in getting confidentiality clauses removed from settlement agreements, stating:

When questioned, their lawyers are often unable to articulate why their clients demand confidentiality and yet they strongly resist the NDA’s removal. This happens even when it is not clear that an NDA was specifically requested by the employer. [ … ] We have been told that NDAs cannot be removed because they are intrinsic to the settlement agreement and “always” included, no discussion.193

144.It has been suggested that the use of confidential settlements to avoid employees having to go to tribunal or being blacklisted by potential employers is an imperfect but necessary solution to the problems faced by employees who experience bullying or harassment.194 Emma Webster of Your Employment Settlement Service (YESS) highlighted the “incredibly vulnerable” position of some discrimination victims who might not feel able to “take on” their employer, for whom a confidential settlement was a solution.195

145.Employment lawyers, unions, individuals who have suffered discrimination and others told us that many employees settle cases and sign an NDA in order to avoid the risks and difficulties of pursuing a tribunal case and the potential subsequent effect on their career.196 This is the case even for employees with strong cases.197 Joeli Brearley outlined findings from research that Pregnant then Screwed had conducted with 260 women who had experienced pregnancy and maternity discrimination and had signed non-disclosure agreements, with 91% saying “that they felt forced to sign that non-disclosure agreement”. She went on:

It is put to them as if it is a choice, but it is not a choice; there is no other option—there is nowhere else for them to go. Having a lawyer and going through to tribunal means that you are going to have to be put out there as a troublemaker and that your career will be ruined for the rest of your life.198

As we have highlighted, there are other drivers behind this feeling of having no option but to sign an NDA including the imbalance of power between employers and employees, poor employer practice in tackling discrimination and handling discrimination appropriately and a lack of enforcement.

146.The evidence clearly shows that there needs to be a package of measures: the misuse of NDAs is one element of a wider system of legislative, regulatory and judicial measures and processes that are failing to protect employees from discrimination and abuse of power. Individuals who have experienced discrimination can feel that they have no option but to reach a settlement, which will routinely include secrecy clauses. We have seen that the use of unethical, vague or excessively restrictive NDAs can create long-lasting fear for those who sign them and can curtail their career.

147.We are encouraged to see that some employers, particularly in the public sector, now routinely settle discrimination cases without using NDAs, demonstrating that confidentiality clauses are not intrinsic to settlement agreements. Other public sector employers must now take the lead in ensuring that NDAs are not used to cover up discrimination and harassment, allowing such behaviour to go unchecked. Lawyers and employers must think more carefully about why they are requesting confidentiality and whether it is needed at all, and individuals should never feel forced into signing an NDA.

148.There is a clear public interest case for changing the law to provide more protection for employees who face job loss because of discrimination at work. Something more radical than tinkering with the wording of NDAs is required. The Government must ensure that legislative, regulatory and judicial systems do more to prevent harassment and discrimination and to support individuals who find themselves subjected to such behaviours. Our recommendations set out the actions that the Government and regulators should take to bring about a step change in the use of NDAs in discrimination cases.

193 McAllister Olivarius (NDA0056)

194 Q22 [Emma Webster]; Q45 [Joeli Brearley]; Q107 [Julie Morris]

196 Witnesses in private; Q25 [Emma Webster]; Qq45–46 [Joeli Brearley], Q107 [Julie Morris]; Prospect Trade Union (NDA0009); Thompsons Solicitors Scotland (NDA0015); Employment Lawyers Association (NDA0017); National Education Union (NDA0049); Oral evidence: Sexual Harassment in the Workplace, HC 725, Wednesday 28 March 2018, Q166 [Gareth Brahams];

197 Employment Lawyers Association (NDA0017); Maternity Action and YESS (NDA0005)

Published: 11 June 2019