Non-disclosure agreements are a contentious but frequently utilized tool at many organizations, but new regulations are being introduced to set some limits on their use. The UK is placing a ban on NDAs in workplace abuse cases, hoping to limit employers from using the tool to cover up instances of harassment or discrimination at work. The UK’s NDA-based harassment regulations are part of an amendment to the Employment Rights Bill, which is expected to be made into law this year.
The change will put a stop to the use of NDAs as a tool to prevent workers from seeking legal action to defend against abuse at work, after recent cases revealed that the contracts had been frequently employed to buy an employee’s silence on such matters. The workplace NDA limits have been under discussion ever since a former assistant to Harvey Weinstein broke her agreement to speak out against the Hollywood mogul, and she has spearheaded the Can’t Buy My Silence campaign ever since.
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The UK is Set to Ban NDAs In Workplace Abuse Cases, Drawing a Line In Favor of Victims
Non-disclosure agreements (NDAs) are legally binding documents that are frequently used within the workplace to restrict employees from publicly sharing information on topics covered by the contract. When used correctly, NDAs can help a business protect its proprietary data and project details from leaking out to competitors, restricting employees from selling closely-guarded secrets to the highest bidder.
The ethics behind the use of NDAs have been frequently discussed as they can be overly restrictive and limit the opportunities employees seek in their future, especially when employees who are unfamiliar with the legalese mistakenly sign on for more than they should.
In the workplace, due to the lack of clear limits on NDAs, they are often used to keep an employee quiet about things they have experienced or witnessed at work. Particularly through non-disparagement clauses that prevent employees from revealing anything that might be damaging to their reputation, employers and their well-paid legal teams are often able to control what is said about them publicly.
Despite the criticisms, using NDAs is still standard practice in many organizations, but it appears that businesses will have to be more careful about where they are applied.
Why Are the Workplace NDA Limits Necessary?
The primary purpose of an NDA is to protect the intellectual property of an organization and prevent leaks that might contain sensitive information. Unfortunately, data suggests that the clauses on an NDA are also used to suppress victims of workplace abuse, forcing them to remain silent and avoid drawing any attention to their experiences. Misuse of NDAs can be very difficult on employees, which is why government-mandated legal protections are essential.
A Chartered Institute of Personnel and Development (CIPD) survey of over 2,000 UK employers last year found that 22% of employers use NDAs when dealing with allegations of sexual assault. This limits the kind of help that employees can seek in such cases, forcing employees to rely on their employer’s goodwill to handle the matter on their own.
What Does the UK’s NDA Reform Mean for Employees?
The UK’s ban on NDA in cases of workplace abuse is now an amendment to the Employee Rights Bill that is passing through Parliament. If put into effect, it would void any NDAs that employers have in place to prevent discussion of any sexual harassment or discrimination within the workplace. This means that even existing contracts in such cases would no longer be legally binding.
“The use of NDAs to cover up abuse and harassment is growing – and sadly, amongst those in low-income or insecure employment across multiple industries and workplaces. This cannot go on. That is why we are stamping out this practice and taking action to ban any NDAs used for this purpose. My message is clear: no one should suffer in silence, and we will back workers and give survivors the voice that they deserve.”
—Angela Rayner, Deputy Prime Minister of the UK
The UK’s NDA Ban Brings up Settlement Concerns
The ban on NDAs in cases of workplace misconduct is a big win for employees who should now be able to seek legal action freely when they are subjected to abuse or harassment at work. The freedom to speak could allow more victims to seek reparations for the abuse rather than suffer in silence, but some lawyers also warn that this could have the reverse effect.
Without the confidentiality clause to make workers more willing to settle the matter quietly out of court, many employers will be willing to engage in prolonged legal battles that leave employees more exhausted without any results. With the change, it could become much harder for the employee tribunal system to handle the influx of cases, and it could be years before employees see any compensation for their experiences or liberation from it.
While this is a valid concern, the workplace NDA limits give employees more freedom to choose whether they want to settle a matter quietly or pursue further action. The freedom to decide and discuss will be invaluable to many down the line, which is why the move has largely been applauded as a step in the right direction.
Are NDAs Legal in the US?
Yes, NDAs are legally allowed in the US, giving employers freedom to protect their proprietary information with a legally binding contract. However, similar to the UK’s NDA reform, there are some restrictions on how they can be used. The Speak Out Act was passed in 2022 with a similar intention to protect victims. It limits NDAs in preventing sexual harassment or assault victims from speaking out about their allegations.
The legislation does not apply to NDAs that were agreed upon after the incident, giving employers some room to tamp down on the conversation following the incident. Victims can privately reach a settlement regarding an incident and then sign a contract to reassure their employers that the matters will be kept quiet and not discussed further following the settlement.
For now, the UK’s ban on NDAs in cases of workplace abuse has not been formulated into law yet, and could see some changes before the broader bill is passed. The Employment Rights Bill is set to bring big changes in the UK, and there are expected to be a collection of regulations that reshape the workers’ experience in the region once passed.
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