Why the Bar Council has got it badly wrong over NDAs

Guest post by Dr Julie Macfarlane and Zelda Perkins, co-founders of Can’t Buy My Silence, a global campaign committed to end the misuse of non disclosure agreements

Zelda Perkins

Inside the solicitor branch of the legal profession, a lot of hard thinking is being done about the inappropriate use of non-disclosure agreements (NDAs), while an argument is breaking out between the Bar Council and the Legal Services Board (LSB).

At the same time, the comfortable ‘NDAs are fine’ consensus appears to be breaking down among individual practitioners.

Since Zelda Perkins became the first woman to break her NDA with notorious predator Harvey Weinstein, there has been a continual flood of revelations about the exploitative and cynical use of NDAs to hide wrongdoing and silence victims.

NDAs create a perfect bubble wrap for organisations and corporations covering up misconduct and inappropriate behaviours that might otherwise harm their reputation. Part of this bubble wrap is that since these agreements are ‘secret’, and talking about an NDA means breaching it, how then to prove that this is happening, its extent and its consequences?

When Can’t Buy My Silence launched in 2021, one of the first challenges was to collect credible data from a lot of very scared people who had signed NDAs. As an empirical researcher and law professor Julie Macfarlane knew this was crucial.

After a 2018 warning notice (updated in 2021) issued by the Solicitors Regulatory Authority (SRA) addressing the risk that NDAs can deter protected disclosures and reporting to regulators, as well as Zelda’s address to the LSB’s 2022 conference, the oversight regulator announced a call for evidence on the use of NDAs, which recently closed.

The Bar Council has published an extraordinary response to the call for evidence, rebuking the LSB for having it at all.

Despite acknowledging that barristers are rarely involved in settlement negotiations and the inclusion of NDAs, the Bar Council scoffs at the idea (describing it as “very muddled thinking”) that some NDAs might be illegal or unenforceable, and questions why the SRA has issued any advice at all (“We are also not aware of any evidence of professional misconduct by solicitors in connection with the use of NDAs or the like”).

We beg to differ. We see NDAs that not only circumvent protected disclosures under whistleblowing legislation, but are so broad (no exceptions, even for talking to family members or a therapist) and unreasonable (an NDA is always a forever gag), as well as negotiated between parties of widely disparate bargaining powers, they are of questionable legality. Recent US and Canadian case law bears this out.

Dr Julie Macfarlane

The Bar Council argues that there is “no evidence” aside from “anecdote and headlines” that NDAs are a problem. Again, we must correct it.

Besides the rapid growth of scholarly articles examining NDA practice, Can’t Buy My Silence has now gathered survey data, in partnership with Speak Out Revolution, from almost 2,000 individuals and detailed personal testimonies from nearly 100 others.

This data is highly consistent, describing many characteristics which call the legality of their NDA into question. For example, virtually no one we have spoken with or heard from in the past two years understood that certain disclosures were protected regardless of an NDA, nor did they foresee (or sometimes even read the NDA clause until months later) the impact of being gagged and thus unable to warn others on their psychological wellbeing – 95% say that they have suffered mental health consequences.

Many describe “take it or leave it” pressure to sign in a very short time frame with no advice about alternative ways to protect their own privacy (for example, a one-sided confidentiality clause) that does not require them in return to protect the other party, typically their employer or a senior figure.

Tellingly, NDAs are becoming so ubiquitous that one third of survey respondents say that they passed on making a formal workplace complaint because they anticipated being required to sign an NDA.

Having dismissed the growing evidence of NDA abuse as anecdotal, the Bar Council statement then repeats the most frequently stated and, dare we say, anecdotal claim about NDAs, that limiting them will mean that cases will no longer settle.

This has always been an illogical assertion, since for the party insisting on an NDA, taking the case into the public domain is exactly what they do not want. In fact, data from the US Equal Employment Opportunity Commission shows settlements in sexual harassment cases, the most common target of legislation now passed in 18 US states, have risen somewhat and not fallen following legislation banning NDAs.

As we continue to work on similar law reform in England and Wales, we welcome the efforts of the LSB and the SRA to try to rein in the worst practices, and strongly disagree with the Bar Council that, unless and until NDAs are rendered unenforceable by legislation, nothing should or can be done.

The ethical conduct of lawyers has always been much wider than simply getting away with avoiding doing something illegal.

Our findings about the abuse of NDAs is borne out by the SRA’s thematic review of NDAs published last month, which found solicitors themselves expressing a range of concerns about NDAs eerily similar to those described by NDA signatories: “From employees having insufficient access to independent legal advice, to employers imposing tight time limits and a sense of urgency to complete settlements, [we] also found significant imbalances in power between parties signing NDAs.”

Also consistent with our own review of hundreds of NDAs, the SRA found that as many as 10% of law firms admitted that they had identified unenforceable clauses in NDAs but weren’t sure what to do about them.

All this evidence makes the (dare we say anecdotal and headline-grabbing?) statement of the Bar Council that “it would be quite erroneous to assume that all, or even most, NDAs or confidentiality agreements operate as some form of unfair gag or fetter on one party” look really out of touch.

We also wonder about what its members think about this statement as we are seeing the formerly comfortable consensus among lawyers over the routine use of template NDAs beginning to break down.

We hear from lawyers every week that they have changed their mind about NDAs having read our evidence about the long-term effects on complainants of being told they can never speak about what happened to them.

Others are realising that they are making the silencing agreements over and over for particular individuals who are then able to continue to repeat their misconduct (think Weinstein, Phillip Green and more recently Crispin Odey, as well as hundreds more cases not yet public).

We find ourselves in agreement with the Bar Council on one point, however. It asserts that only Parliament can ultimately stop lawyers using NDAs. Earlier this year, legislation came into force that prohibits universities and colleges in England from using NDAs to cover up sexual misconduct, harassment and bullying.

This ban needs to be extended to other workplaces and expanded to include the many cases of racial and other discrimination we also see being covered up with NDAs. This would bring the UK into line with many other common law jurisdictions where legislation restricting NDAs is either enacted or in progress including Ireland, Canada, the US and Australia.

NDAs have become default clauses not only in employment law settlements, but also in consumer and services disputes, hiding critical information from the public, creating ongoing trauma for individuals and undermining public faith in the justice system. This needs to change.

We report separately on the Bar Council’s response to this blog.

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