Government set to resist calls for ban on NDAs in the workplace

Miller: So many NDAs are drawn up by non-lawyers

The government indicated this week that it would resist calls for a statutory ban on non-disclosure agreements (NDAs) in the workplace.

It was told in the House of Commons this week that, while lawyers “are part of the problem”, the fact that many NDAs were drafted by non-lawyers – even artificial intelligence – meant regulating lawyers’ role was not enough.

Responding to a Westminster Hall debate secured by Conservative MP Dame Maria Miller, business minister Kevin Hollinrake said a 2019 government consultation “found some support for NDAs when they helped victims to make a clean break and move on”.

He continued: “We feel that an outright ban across all organisations may therefore not be appropriate and could have unintended consequences for employees.”

Dame Maria, former chair of the Commons’ women and equalities committee – which has strongly pushed for action on NDAs – highlighted the work the Solicitors Regulatory Authority (SRA) has done to warn solicitors about the standards expected of them on NDAs.

She said: “The lawyers are part of the problem… The SRA has been proactive and is to be applauded, but in reality the questionable usage of NDAs continues, first, because the SRA found that more than a third of law firms were not even aware of the 2018 [warning] notice—something that I am sure they are putting right—and secondly, because so many NDAs are drawn up by people who are not regulated by the legal profession, or maybe not regulated at all, and this is set to grow.”

She said ChatGPT, asked to write a standard UK severance contract after discrimination at work, automatically inserted a confidentiality clause that required the signatory “not to disclose any details related to the discrimination claim or this agreement to third parties, except as required by law”.

There were no further details, Dame Maria recounted. “How many people are now using these formula contracts as a matter of course? This might be the future of accessing legal expertise for many people, so we cannot rely on professional legal ethics and regulation to ensure that employers act in the right way. We need the law to be clear, too.”

She added that while other bodies, such as Acas and the Chartered Institute of Personnel and Development, have issued guidance on NDAs, “the evidence of the scale of the problem shows that the advice is simply not cutting through—it is not enough”.

“Therefore it is time that we turned advice and encouragement into law—I think there are very clear indications that organisations such as the Bar Council are also seeing that as the way forward… so that apparently legal clauses in legal contracts cannot be used by anyone, lawyer or not, to cover up illegal wrongdoing at work.”

Fellow Conservative Mary Robinson, chair of the all-party parliamentary group for whistleblowing, said that every case of workplace whistleblowing had one thing in common: “not only did the whistleblowers feel obliged to sign the NDAs, without necessarily fully understanding them in some cases, but their own lawyers reminded them of their legal duty to remain silent once they did”.

She agreed that “NDAs are being used as a tool to cover up wrongdoing, to silence victims and whistleblowers. We have allowed organisations to get away with using intimidation and fear to conceal evidence of wrongdoing, forcing whistleblowers and victims of crime to keep silent for too long”.

She, along with several other MPs, backed Dame Maria’s call for legislation. Labour’s shadow employment rights minister, Justin Madders – a former employment solicitor – said he had handled “thousands” of settlement agreements when in practice.

“I can confirm that NDAs are standard and the attitude of most employers, when challenged on the inclusion of them, is that they are a standard clause and the agreement is presented on a take-it-or-leave-it basis—whether the NDA is necessary or not.

“The reason they continue is the imbalance in power in the employment relationship. The SRA found that only six of 25 solicitors it interviewed [for its recent thematic review] reported even questioning the need for a confidentiality clause.

“The fact that those drafting them give no particular weight to them is a trend. It is in direct contradiction to the advice given by Acas, which says that they should only be used where necessary and not as a matter of course.

“There are many workers bound by completely unnecessary NDAs at the moment, and when an important industry regulator, such as the SRA, suggests there is a wholesale misuse of a contractual term—one that, as we have heard, can have a profoundly negative impact on workers—there is a good argument to say that the government need to intervene. It is a good example of where there needs to be more intervention.”

Mr Madders also highlighted the “damning indictment” of the Legal Services Board in its call for evidence earlier this year, which said “the evidence of continuing misuse of NDAs suggests that clearer and more effective expectations for the professional conduct of legal professionals may be required”.

Several speakers said that given the government had introduced a ban on the use of NDAs in higher education sector, there was no reason not to do the same everywhere else.

Mr Hollinrake said: “We are clear that the use of NDAs to intimidate victims of harassment and discrimination into silence cannot be tolerated.

“We are already taking action in the higher education sector; we have published extensive guidance and consulted on the use of NDAs in the workplace; and we are carefully considering how to tackle wrongful practices in a wider context.”

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