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23 September 2019

191: Report published on use of non-disclosure agreements in discrimination cases

The Women and Equalities Select Committee (WESC) has published a report on the use of non-disclosure agreements (NDAs) in discrimination and harassment cases.

This is a wide-ranging report which also covers Employment Tribunal procedure, costs, time limits, corporate governance and reporting requirements. WESC would like the government to reset the parameters around the use of NDAs and to address the failings in the Tribunal system in order to ensure that all employees who have experienced discrimination or harassment have a proper means of redress. It also stresses the need to address the substantial imbalance of power between employers and employees which means that employees may have little choice about agreeing to a settlement with stringent confidentiality provisions.

It remains to be seen to what extent the government accepts these recommendations, since it has previously rejected a number of them, but the government is also currently undertaking a consultation on the possible regulation of NDAs in harassment and discrimination cases.

Key recommendations for the government in WESC’s report include:

  • ensure that NDAs cannot prevent legitimate discussion of allegations of unlawful discrimination or harassment, or be used to cover up allegations;
  • consider a requirement for employers to investigate all discrimination and harassment complaints within six months, regardless of whether a settlement is reached;
  • introduce legislation to require employers to provide a basic reference for all former employees;
  • require standard, plain English confidentiality and non-derogatory clauses to be used in settlement agreements, and ensure that these provisions are specific about which information can and cannot be shared and with whom;
  • ensure that NDAs cannot restrict an employee’s right to access professional support and advice;
  • require employees to receive independent legal advice specifically on the nature and limitations of any confidentiality clause and the disclosures which can still be made;
  • allow employees to decide whether to tell a new employer why they left their previous employment if allegations of discrimination or harassment were involved;
  • strengthen corporate governance requirements to require employers to meet their responsibilities to protect employees from discrimination and harassment;
  • require employers to report on the number and type of discrimination and harassment complaints and their outcomes, the number of NDAs entered into, and the type of dispute they relate to;
  • require named senior managers at board level to oversee anti-discrimination and harassment policies and procedures and the use of NDAs;
  • place a mandatory duty on employers to protect workers from harassment and victimisation in the workplace;
  • improve the remedies that can be awarded by Tribunals as well as the cost disincentives to take a case forward. Tribunals should be able to award punitive damages, and awards for the non-financial impact of discrimination should be increased significantly; and
  • extend Tribunal time limits for bringing a sexual harassment, pregnancy or maternity discrimination claim from three to six months.

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