June 28, 2019

#Metoo: Recommendations on confidentiality clauses in discrimination and harassment cases

Following the Women and Equalities Select Committee's report on sexual harassment in the workplace in July 2018, it launched an inquiry into the use of confidentiality and non-disparagement provisions – often referred to as non-disclosure agreements (NDAs) - in settlement agreements in discrimination and harassment cases. A key concern for the Committee was that some allegations of sexual harassment are being "dealt with" using NDAs that prevented individuals from speaking about the alleged behaviour, without any proper investigation or sanctions for the alleged perpetrator.

The Committee has now published its report, which comes after the government's consultation on the regulation of NDAs in cases of workplace harassment and discrimination (see our update).

The report makes a number of recommendations, including:

  • The government should consider requiring employers to investigate all discrimination and harassment complaints, and there should be guidance on investigating these - even if a settlement agreement is agreed.
  • New legislation should be introduced within 12 months requiring employers to provide a reference for all former employees that confirms, as a minimum, their dates of employment.
  • New legislation should ensure that NDAs do not suppress legitimate discussion about discrimination or harassment allegations. If individuals raise allegations of unlawful discrimination or harassment, then in addition to being able to discuss certain issues with nominated close family and friends, they should be able to decide whether to tell a new employer why they left their previous employment. Also, NDAs should not prevent individuals from sharing information that may be helpful to another employee's harassment or discrimination claim.
  • The Committee welcomes the government's proposal in its consultation that the legal advice required for a settlement agreement - on its terms and effect - should be extended to cover the nature and limitations of any confidentiality clause and the disclosures an individual can make. But it also recommends that:
    • the required advice should also cover any concerns about the reasonableness and enforceability of NDA clauses
    • employers should cover the legal advice costs in full
    • if individuals wish to negotiate the terms of the NDA, employers should make further contributions to the legal advice costs – even if the individual does not sign the agreement.
  • Employers should have to appoint a named senior manager to oversee discrimination and harassment policies, and the use of NDAs in such cases.
  • Employers should have to collect data and report on:
    • the number and type of discrimination and harassment complaints and their outcomes, and
    • the number of NDAs entered into and the type of dispute they relate to.
  • The three month time limit for bringing sexual harassment, pregnancy or maternity discrimination claims should be extended to six months.
  • A review of whistleblowing laws should consider the issue of when a disclosure would be in the public interest, and therefore qualify for whistleblower protection, particularly when the disclosure is of a single act of discrimination against an individual.

What this means for employers

It will be interesting to see the government's response to this report - and the impact, if any, it has on the government's consultation on NDAs which closed on 29 April 2019.

It seems unlikely that the government will accept all the Committee's recommendations, given that they are far-reaching and some have already been rejected by the government. Some of the more onerous proposals which the government will probably be reluctant to endorse include making employers pay additional legal costs to negotiate confidentiality provisions and introducing additional reporting requirements for employers, particularly as gender pay gap reporting may be extended to smaller employers and the ethnicity pay reporting may also be introduced.