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Education Briefing - Further developments on the use of non-disclosure agreements in harassment and discrimination cases

  • United Kingdom
  • Education - Briefings


The issue of sexual harassment remains a high profile one with widespread local and national coverage across multiple sectors and jurisdictions. This has included extensive discussion and analysis of the issue in the education sector.

Last year the Women and Equalities Committee made a number of far reaching recommendations on preventing and dealing with sexual harassment in the workplace (see our briefing) which included recommendations on the use of non-disclosure agreements (NDAs) including confidentiality clauses in settlement agreements. These were that the Government should legislate to require the use of standard, approved confidentiality clauses (including a clear explanation of what disclosures are protected under whistleblowing legislation and cannot be prohibited or restricted) and that the definition of protected disclosures and prescribed persons under whistleblowing legislation should be widened to include disclosures of sexual harassment to the police, all regulators and to any court or tribunal.

On 18 December 2018 the Government published its response to the Committee’s recommendations. The Government agreed that NDAs required better regulation and that it would consult on the best way of achieving that. This consultation commenced on 4 March 2019 and ran until 29 April 2019. In particular the Government consulted on clarifying the law to make it clear no confidentiality clause can prevent any disclosure to the police (and potentially other bodies); ensuring the limits of confidentiality clauses are clear to the worker and that there are appropriate enforcement measures (see our briefing).

The Government’s response to the consultation exercise is awaited.

The Women and Equalities Committee has now published a further report, this time focusing on the use of non-disclosure agreements in harassment and discrimination cases. This results from an inquiry launched by the Committee in November 2018.

The report’s summary identifies the following four key recommendations:

• to ensure that NDAs cannot prevent legitimate discussion of allegations of unlawful discrimination or harassment, and stop their use to cover up such allegations

• to require standard, plain English confidentiality, non-derogatory and similar clauses in settlement agreements which are specific about what information can and cannot be shared and with whom

• to strengthen corporate governance requirements to require employers to meet their responsibilities to protect those they employ from discrimination and harassment

• to require named senior managers at board level or similar to oversee antidiscrimination and harassment policies and procedures and the use of NDAs in such cases.

The Committee also renewed its previous calls for the Government to:

• place a mandatory duty on employers to protect workers from harassment and victimisation in the workplace

• urgently improve the remedies that can be awarded by employment tribunals as well as the costs regime

However, there are 24 recommendations in total spread over four chapters. Below we set out each of these chapters and go into more detail on the recommendations within each.

Why so many NDAs? Benefits, drawbacks and drivers

In this section, the Committee started by noting that, although evidence was given to it that NDAs can be beneficial to both employers and employees in workplace discrimination cases, it feels that many employees (and lawyers) are not fully aware of the potential downside of signing NDAs.

Amongst the concerns expressed in the report are that NDAs:

• can cover up unlawful discrimination and harassment, allowing management behaviour and organisational culture to go unchallenged and unchanged;

• can enable perpetrators to go on to harass or discriminate against others and prevents victims of such behaviour from knowing about or supporting other complaints;

• are used to avoid investigating unlawful discrimination and harassment complaints and holding perpetrators to account (the report refers to Law firm McAllister Olivarius suggesting that NDAs particularly contributed to this happening in the education sector); and

• are being “traded” for things that employers should be providing as a matter of course, such as references and remedial action to tackle discrimination

In consequence, the Committee recommends that the Government should begin an awareness-raising programme for employers and employees about how to handle grievances fairly and effectively (including guidance on the handling of investigations into allegations of unlawful discrimination and harassment following a settlement agreement which is entered into before any investigation is completed); consider requiring employers to investigate all discrimination and harassment complaints regardless of whether a settlement is reached; and legislate to require employers to provide, as a minimum, a basic reference for any former employee confirming that they worked for that employer and the dates of their employment.

Going to employment tribunal

Amongst issues identified by the Committee as deterring claims being brought before an employment tribunal are that the online publication of tribunal judgments has increased the risk of claimants being “blacklisted” by future employers and is a significant barrier to potential claimants bringing discrimination claims; the lack of affordable legal advice available for employment discrimination cases; the tribunal system may have become too onerous for litigants in person with complex discrimination claims and that costs and “low awards” are a key barrier to bringing a claim and one of the main reasons for settling cases instead of pursuing them.

To deal with these points, the Committee recommends that the Government:

• commissions an equalities review of the tribunal system considering whether particular groups of people, or those with particular types of claim, are being disproportionately disadvantaged by the way the system currently operates and whether modifications to the system are required to rectify this;

• reviews legal aid thresholds and monitors the effect of the changes it is making to improve access to legal aid;

• reviews the practical support currently available to litigants in person with a view to filling gaps in support;

• ensures that there is adequate guidance for tribunal judges and litigants about the circumstances in which a refusal to settle a claim may be considered “unreasonable” and that refusal to agree to an NDA should never, in itself, be deemed unreasonable; and

• improves the remedies that can be awarded by employment tribunals as well as the costs regime – in particular that tribunals should be able to award punitive damages; the Vento bands for injury to feeling awards should be increased “significantly” and there should be a presumption that tribunals will normally require employers to pay the employee’s costs if the employer loses a discrimination case in which sexual harassment has been alleged

The Committee also repeats the call it made in its previous report that time limits should be extended from three to six months in cases where sexual harassment is alleged and there should be a wider review of the time limit in all discrimination cases. This is to address its concerns that the three month time limit has a deterrent effect on those considering making a tribunal claim.

Content and effect of NDAs

The Committee says it was keen to hear from individuals about their experience of signing an NDA and its effect on them. Perhaps not surprisingly, the majority of those who gave evidence about their experience of signing an NDA expressed grave concerns about how NDAs were used by employers, with many saying that they had not wanted to sign one but had felt they had no other option.

The Committee was “deeply concerned” that some individuals who sign NDAs are left uncertain about what they are permitted to say about the alleged unlawful discrimination, harassment or other employment issue that led to the settlement and that, whilst it is understandable that an employer might wish to keep confidential the size of the financial settlements, it should be for individuals to decide whether to tell a third party or a new employer why they left a previous employment if the case involved allegations of unlawful discrimination.

A further concern expressed by the Committee relates to its belief that NDAs are being used to deter whistleblowers from being able to speak out in the public interest and that there is a lack of clarity about when an individual complaint of sexual harassment or other discrimination could be in the public interest. The Committee welcomes the Government’s agreement to add the Equality and Human Rights Commission (EHRC) to the list of prescribed persons under whistleblowing legislation and says it looks forward “to hearing whether it plans to add any other regulators or relevant authorities to the list, as we previously recommended”. The Committee notes, however, that the Government’s consultation on NDAs “does not cover the proposed changes to whistleblowing law that the Government has committed to make”.

Several witnesses to the inquiry said that the use of NDAs in discrimination cases made it difficult for other victims of discrimination to gain supporting evidence from colleagues. The Committee points to the fact that under the Equality Act there are provision rendering pay secrecy clauses unenforceable and it suggests this principle could be extended to apply to any provision in an NDA seeking to restrict disclosures made for the purposes of establishing whether other employees have experienced discrimination or harassment.

The Committee welcomes the Government’s proposal to require that the independent advice a worker receives on a settlement agreement must cover the nature and limitations of any confidentiality clause and the disclosures that a worker is still able to make but believes that the cost of this should not fall on the employee. The Committee’s view is that the sort of contribution normally made by an employer to the employee’s legal costs will rarely cover the complex advice needed in these sort of cases – and of course there is no obligation on the employer to make any contribution.

The Committee’s recommendations in this chapter are that the Government should:

• review the operation of measures under whistleblowing legislation and in particular clarify the extent to which it provides protection to those who wish to raise concerns with regulators and other relevant bodies or people about workplace discrimination or harassment;

• legislate to ensure that NDAs cannot prevent signatories from sharing information that may be helpful to a potential discrimination or harassment complaint or claim by another employee;

• require employers to make a financial contribution sufficient to cover, as a minimum, the content and effect of any confidentiality, non-derogatory or similar clauses, and any concerns about the reasonableness or enforceability of those clauses - regardless of whether the employee signs the agreement or not;

• legislate to ensure that any clause in a settlement agreement that has the effect of controlling what information an individual can share should be clear and specific about what information cannot be shared and with whom; contain agreements about acceptable forms of wording that the signatory can use and contain clear, plain English explanations of the effect of clauses and their limits, for example in relation to whistleblowing; and

• legislate to require the use of standard, plain English, confidentiality, non-derogatory and similar clauses where these are used in settlement agreements (with additional guidance on suitable forms of wording to ensure that they are clear and specific) and that non-standard clauses should be legally unenforceable unless it can be shown that there is a clear need for alternative clauses.

The Committee also reiterates its previous recommendation that the Government should make it an offence for an employer or their professional adviser to propose a confidentiality clause designed or intended to prevent or limit the making of a protected disclosure or disclosure of a criminal offence. The Government has said that it does not intend to take this recommendation forward as it could be difficult to enforce. The Committee describes this argument as “weak”.

Finally, in this chapter the Committee says it is “deeply disappointed” by the Government’s proposal to merely make NDA clauses unenforceable if they do not meet wording requirements. The Committee does not believe this is a sufficient encouragement to ensure that employers draft clauses correctly. It therefore restates its previous recommendation that the use of provisions in confidentiality agreements that can reasonably be regarded as potentially unenforceable should be clearly understood to be a professional disciplinary offence for lawyers advising on such agreements.

Compliance and enforcement

The Committee has considered whether there should be reporting requirements in relation to NDAs, as some witnesses to the inquiry suggested that employers should be required to report annually on the number of NDAs they agreed, whereas others suggested that this could turn into a tick box exercise and the figures might not provide very useful information. The Committee concluded that there are potential merits in requiring data collection, and potentially reporting, but that it is important to consider further how such data could be used and any potential unintended consequences. It therefore recommends that the Government consider requiring employers to collect data and report annually on:

• the number and type of discrimination and harassment complaints/grievances and the outcome of such complaints; and

• the number of settlement agreements containing confidentiality, non-derogatory and similar clauses they have agreed, and the type of dispute they relate to.

The Committee says it is convinced of ”the need for boards of public and private companies to take greater responsibility in overseeing their organisation’s use of NDAs in settling harassment and discrimination cases, as well as its action to tackle and prevent improper behaviour”. Consequently it says that the Government must strengthen corporate governance requirements by requiring employers to nominate a director (or equivalent) to hold responsibility for:

• overseeing the use of NDAs and ensuring that, where they are used in settling discrimination and harassment cases, their use is appropriate;

• reviewing settlement sums and monitoring whether these are an appropriate use of company resources; and

• overseeing anti-discrimination and harassment policies, procedure and training, including learning lessons from how previous cases were handled

and that there should be appropriate sanctions for poor practice.

In its previous report, the Committee recommended the introduction of a statutory code of practice on sexual harassment and this recommendation was accepted by the Government. In evidence to the latest inquiry, the EHRC said that it was expecting to publish this code in July and that it will specify the steps that employers should take to prevent and respond to sexual harassment, including guidance on the use of NDAs in such cases. Whilst the Committee welcomed this development it said it is sceptical as to how effective the code will be without a corresponding duty requiring employers to take appropriate action to tackle these issues. It, therefore, repeats its previous recommendation that the Government should place a mandatory duty on employers to protect workers from harassment and victimisation in the workplace. The Government has said it intends to consult on the evidence base for introducing such a duty.


The Committee’s report will add to the debate around the use of confidentiality clauses in settlement agreements and it will be interesting to see which, if any, of the recommendations are reflected in the Government’s response to the consultation exercise which closed on 29 April 2019. It is clear that significant momentum is building for tighter regulation of the content of confidentiality clauses and greater scrutiny and accountability over their use by individual employers.

The use of confidentiality clauses in settlement agreements is long-standing and employers have traditionally approached settlements on the basis that the terms of the settlement reached would be confidential and the agreement would also draw a line under the dispute, with neither side discussing it further in public. That blanket approach to confidentiality clauses is coming under significant challenge and there is a developing trend in the sector towards a more limited use of confidentiality clauses in settlement agreements. It is also possible that employers may choose to litigate more cases to a resolution in the tribunals and courts rather than to settle, if the permitted scope of confidentiality clauses becomes narrower and the use of confidentiality clauses becomes more “toxic”, to avoid a situation in which the case is settled but a claimant can continue to pursue the allegations through public statements.

Some institutions have already taken a policy decision not to include confidentiality clauses in cases where harassment is alleged. While this approach allows complainants to speak out, it brings into sharper focus other legal and practical issues regarding confidentiality, for example the nature and extent of confidentiality attaching to internal HR procedures.

We can help you to navigate these highly complex issues and manage competing legal obligations to develop a clear understanding and approach which you can reflect in your internal procedures. We have also developed “early warning” clauses which can be included in settlement agreements instead of confidentiality clauses – to ensure that you receive advance notice of public statements which could identify the institution or individuals, enabling you to prepare appropriate media responses.

For more information contact

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