The Government has unveiled new legislation to limit so-called “gagging clauses”. Tim Gooder examines the proposals.
Confidentiality clauses, also known as non-disclosure agreements (NDAs) or gagging clauses, are provisions which seek to prohibit the disclosure of information.
They can serve a useful and legitimate purpose in the employment context, as part of both employment contracts and out of court settlement agreements. However, a number of cases have come to light where employers have used confidentiality clauses to prevent victims of workplace harassment or discrimination from speaking out.
In one widely reported case, the gagging clauses introduced into an out of court settlement on behalf of Harvey Weinstein, required his former personal assistant to:
- Obtain a confidentiality agreement from any doctor she visited in connection with the incident; and
- Not to speak about the alleged incident even when required to do so by law or “where reasonably practicable in the case of any criminal legal process” without first giving Miramax’s solicitor at least 48 hours written notice.
There has since been widespread condemnation of the use of NDAs in this way and the solicitor involved in drafting these particular clauses on behalf of Harvey Weinstein and Miramax has been referred to the Solicitors Disciplinary Tribunal.
In March 2019, the government launched a consultation to seek evidence and views of the use of confidentiality clauses in the employment context. This included consulting on a number of proposals to limit the misuse of confidentiality clauses and enhance clarity for individuals on what they should and should not cover.
The final proposals in the Government's response to its consultation on confidentiality clauses included:
- Legislating so that no provision in a confidentiality clause can prevent disclosures to the police, regulated health and care professionals and legal professionals;
- Legislating so that limitations in confidentiality clauses are clearly set out in employment contracts and settlement agreements;
- Producing guidance for solicitors and legal professionals responsible for drafting settlement agreements;
- Legislating to enhance independent legal advice received by individuals signing confidentiality clauses; and
- Enforcement measures for confidentiality clauses that do not comply with legal requirements in written statements of employment particulars and settlement agreements.
The full consultation report is available to download here.
Business Minister Kelly Tolhurst has now announced plans for new legislation which will prohibit NDAs being used to prevent individuals from disclosing information to the police, regulated health and care professionals, or legal professionals, such as a doctor, lawyer, or social worker.
The updated legislation will also:
- ensure employers make clear the limitations of a confidentiality clause, in plain English, within a settlement agreement and in a written statement for an employee, so individuals signing them fully understand what they are signing and their rights;
- extend current legislation so that individuals signing NDAs will get independent legal advice on the limitations of a confidentiality clause – including making clear that information can still be disclosed to police, regulated health and care professionals, or legal professionals regardless of an NDA; and
- introduce new enforcement measures to deal with confidentiality clauses that do not comply with legal requirements - for example, an NDA in a settlement agreement that does not follow new legislative requirements will be legally void.
The new legislation will therefore limit the scope and effectiveness of NDAs and could result in more cases becoming public and going to court.
This is another warning for employers across all sectors about the importance of taking positive steps to reduce the likelihood of sexual harassment and discrimination occurring in the workplace. As a preventative measure we suggest the introduction of training and awareness sessions to ensure that staff behave appropriately and to help prevent future cases.
Bevan Brittan provides specific training on understanding, preventing, reporting and handling sexual harassment. Details can be found here.