Jones: Really important issues
The government is “working at pace” on further restrictions on the use of non-disclosure agreements (NDAs), a minister has told the House of Lords.
Speaking to peers during a debate last week on the Employment Rights Bill, Baroness Jones of Whitchurch said the government was “actively looking at all options” and recognised the “appetite” among members for action.
Peers voiced support for a range of amendments to the bill, all of them limiting employers’ use of NDAs, particularly in cases of sexual harassment. Baroness Jones said the amendments raised “really important” issues.
“There is an issue about the breadth of the issues and the extent to which we need to legislate or perhaps amplify things that are already the law but are not understood to be the law. We have more work to do on this, but we are working at pace on it.”
Baroness Jones said there were already “important legal limits and safeguards” on the use of NDAs in the workplace, including requirements for workers to have independent advice on agreements relating to sexual harassment and other breaches of the Equality Act 2010.
The proposed amendments represented “wide-reaching changes with significant impact on businesses, which should be consulted.”
She added: “I assure noble Lords that we have heard the strength of feeling and we will continue to consider further the issues raised during the course of this bill.”
In the debate, Liberal Democrat peer Baroness Kramer said the government had held “numerous consultations” on NDAs, run by the former Department for Business, Energy and Industrial Strategy (BEIS), the Equality and Human Rights Commission and a Treasury committee.
“Ireland and 27 US states already have such legislation. If she [Baroness Jones] looks at the many examples of the use of NDAs to silence abused women that were cited in that Commons debate on this bill, she will realise that the need for action is urgent.”
Barrister Baroness Kennedy, who proposed her own amendment, said: “I make it clear that there is no suggestion here of banning NDAs generally. There is a role for NDAs – people leaving employment should not be able to take with them the secrets of the company or its client list, for example.
“What we are talking about is the misuse of non-disclosure agreements to silence complainants, particularly women complaining of sexual harassment and abusive conduct by employers, supervisors, the boss, fellow workers or the client of an employer.”
If a complainant requested an NDA because “that is what, let us say, she would like to have”, the amendment required her to be offered independent advice.
Baroness Jones of Moulsecoomb, the Green Party peer, said NDAs could be “exceptionally toxic and corrosive” when used to cover up wrongdoing by employers.
“The growth of the use of non-disclosure agreements is a big concern. Recent allegations that gagging clauses contributed to the cover-up of decades of sexual abuse by former Harrods owner Mohamed Al Fayed have once again led to calls to ban them here in the UK.”
Conservative peer Baroness Morrissey said: “I note that Ireland… has already adopted this practice of allowing NDAs for sexual harassment cases only in what are described as ‘excepted circumstances’. In those cases, employers are required to cover the employee’s reasonable legal costs…
“Firms with good cultures that do not have sexual harassment cases will not need to enter into NDAs. They will have nothing to pay – another incentive to encourage companies to prevent harassment occurring in the first place.”
She added: “No data is reported at present on the use of NDAs for sexual harassment and, of course, the nature of these agreements means that there are no revelations about the underlying issues.
“From personal experience, I have heard from women working in finance who sometimes use a third party to tell me their story because they are keen to see something done about it.”
Labour peer and barrister Baroness Chakrabati, who proposed her own amendment, said this was an area where there was “some value in putting some common law principle clearly, succinctly and non-exhaustively on the face of a statute”.
This would give “confidence and clarity so that people know that abusive non-disclosure agreements – not the ones that we think are valuable, but abusive ones – which are being used to silence and cover up revelations of illegal activity, broadly, will not be enforceable in court, whether or not you have shelled out some money in the first place”.
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