ACAS has published new Guidance on the use of Non-disclosure Agreements also known as Gagging Orders. The Guidance helps employers, managers, HR professionals, workers, worker/trade union representatives and job applicants to understand;
- what non-disclosure agreements are
- when non-disclosure agreements might be used appropriately
- when non-disclosure agreements might be inappropriate because they are unlawful or raise serious moral or ethical issues, for example because they are misleading, cover up wrongdoing or have been entered into under pressure so that they are not genuinely voluntary
- that non-disclosure agreements should not be used as a default option
- how to change and improve workplace practices around non-disclosure agreements so that they are never entered into as a matter of routine.
Gagging Orders are widely used across industries, including film, advertising, finance, universities and the health service, typically to prevent workers from making sensitive or damaging information public. They are legally drafted contracts which can apply to commercial information or trade secrets, but can also be used to prevent the spreading of anything likely to damage an organisation’s reputation. You will usually find it as a confidentiality clause in a settlement agreement.
In 2019, the House of Commons Women and Equalities Committee Inquiry into The use of non-disclosure agreements in discrimination cases found that allegations of unlawful discrimination and sexual harassment at work are being routinely covered up by employers through secret non-disclosure agreements (NDAs). The report said that difficulties in pursuing claims through employment tribunals ( where legal aid financial thresholds have rendered legal advice largely unaffordable) meant that workers often felt they had little choice but to reach a confidential settlement prohibiting them from speaking out.
NDAs gained particular notoriety after the #MeToo scandal broke and Harvey Weinstein’s prolific use of them to keep a lid on allegations of sexual harassment and assault was exposed. In the Weinstein Company’s bankruptcy filing in 2018, it stated that it released anyone “who suffered or witnessed any form of sexual misconduct” by the Hollywood film producer from their NDAs.
The frequent practice of using NDAs in UK universities to prevent staff from going public with claims of bullying or sexual misconduct has also caused outrage. The BBC says that companies have spent about £87m on pay-offs with NDAs since 2017.
You MUST take legal advice before you sign any settlement agreement, even if its a COT3 from ACAS.
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