Workplace gagging clauses ‘need clarification’

A review into the use of workplace non-disclosure agreements (NDAs) is long overdue but may not achieve a great deal, says a leading employment law specialist.

Edward O’Brien, Associate Solicitor at award-winning Dorset law firm Blanchards Bailey LLP, believes some clarification is needed to protect both employers and employees.

The Government is currently undertaking a comprehensive review and consultation process that could lead to new legislation preventing employers from using confidentiality agreements to stop workers from making serious complaints public or preventing the disclosure of information in criminal proceedings.

This issue has been highlighted by the #metoo movement and follows a series of high-profile cases in which employees signed NDAs to keep their complaints quiet after being paid large sums of money.

Legal 500 recommended solicitor Mr O’Brien, part of Blanchards Bailey’s Litigation and Employment team, said: “Although legislation allowing whistleblowers to bypass NDAs is already in place, the requirement for that whistleblowing to be in the public interest requires more clarification.

“At the moment, it is not clear whether reporting criminal conduct or sexual harassment that only affects one individual would be considered to be in the public interest.

“The review is very much at the consultation stage, there has been no timescale published and there is every chance there will be no real conclusion once the headlines have died down.

“However, clearly clarification of the law is needed to prevent vulnerable employees from being silenced, and so the review is a welcome step in the right direction.

“NDAs are regularly used by businesses to protect sensitive commercial information in contracts and also appear in settlement agreements, where they are more commonly referred to as ‘confidentiality clauses’.

“Settlement agreements play an important and legitimate role in business life, and have long been a tool used by employers to end an employment relationship whilst ensuring that no tribunal claims, leaking of trade secrets or reputational damage occurs.

“However, problems can arise through misuse of these agreements to silence victims when vulnerable individuals are pressurised into signing settlement agreements at a time when emotions are raw and they feel that they can’t face the stress of an employment tribunal claim.

“This leads to individuals later being unable to speak out about their experiences, even where their ex-employer has not appeared to have changed its ways.

“It is incumbent on the legal profession to sometimes take a step back to question why certain instructions are being received and to look at the bigger picture involved. ”

Mr O’Brien, based at Legal 500 firm Blanchard Bailey’s Blandford office, said whistleblowing legislation also needed clarification to allow employees to still disclose criminal or sexual behaviour after signing a settlement agreement.

“The bottom line is that settlement agreements are not binding unless legal advice has been taken. It is imperative that both employers and employees should seek the best possible advice to ensure that the terms of the agreement and any NDA clauses are fair. It is good practice to ensure provisions protecting reputations apply to both parties.”

Mr O’Brien, who works with individuals and employers, ranging from local family businesses to national companies, and advises on all aspects of employment law and HR matters, said a vigilant watching brief was required over possible changes to legislation.

He added: “If legislation is applied retrospectively it could well render current NDAs and confidentiality clauses unenforceable. This would cause huge shockwaves to businesses, who may find skeletons leaving previously tightly locked closets.”

Blanchards Bailey, with 80 staff, is based in Blandford with offices in Dorchester, Shaftesbury and Weymouth.

The firm received unprecedented recognition in UK's leading law sector directory, the Legal 500. The annual publication, The Legal 500 2018/19, recommends the firm in a record seven specialist categories with 11 individual lawyers mentioned, including all five Principals.

Blanchards Bailey won a hat-trick of titles at the 2019 Dorset Legal Awards: Law Firm of the Year (up to 99 employees), Company Commercial Team of the Year and Private Client Team of the Year.