The demise of the gagging order?

Proposed legislation will water down non-disclosure agreements in the wake of the #MeToo movement.

by Johnny Aldred
Last Updated: 24 Oct 2019

The days when companies could use non-disclosure agreements (NDAs) as a way to hide their misdemeanours may soon be at an end. It’s commonplace for anyone accepting a role in a company to have to sign an agreement that includes some kind of confidentiality clause.

Proposed legislation will seek to prevent cover-ups of cases of harassment, discrimination or assault and will mean that companies have to be much clearer about the implications of documents their staff are being asked to sign.

The issue of people being "gagged" by NDAs, legally preventing them from speaking out, has become ever more topical in the wake of the #MeToo movement, which was started by civil rights activist Tarana Burke in 2006 but shot to prominence in 2017 after allegations about Hollywood mogul Harvey Weinstein’s predatory behaviour.

Agreements to prevent disgruntled or former employees sharing business-sensitive information with competitors will still be deemed fair and legitimate under the new legislation. However, some NDAs are far more aggressive and potentially problematic because they effectively seek to have the signatory waive any right to say anything that might be deemed problematic by the person or company drafting the agreement.

In the US, for example, anyone (staff or volunteer) who was part of Donald Trump’s 2016 election campaign was required to sign an agreement that sought to protect Trump from any leaks of "confidential" information that might embarrass him or his family, not only during the campaign but "at all times thereafter".

The American Arbitration Association is currently investigating its legality, following a complaint. Closer to home, in an unusual move in October 2018, Labour peer Lord Hain used parliamentary privilege to name Arcadia’s Sir Philip Green as the man at the centre of Daily Telegraph allegations of sexual harassment and racism.

Under the new legislation, paying staff large sums of money to sign away the right to tell their story will no longer guarantee anonymity because signees cannot be prevented from reporting information to the police, regulated health and care professionals or lawyers.

As well as finding the right balance between allowing employees to act as whistleblowers with a company’s right to protect sensitive or privileged information, the new law seeks to ensure clarity for all parties, and will mean that independent legal advice must be offered to clearly explain the limitations of such confidentiality clauses.  

Image credit: Gwengoat via Getty images

Tags:

Find this article useful?

Get more great articles like this in your inbox every lunchtime