IWD: We need to talk about Non-Disclosure Agreements

19 February 2018

Non-Disclosure Agreements (NDAs) form an integral part of commercial life.  If two businesses want to merge or even just enter into a contractual relationship, it is standard practice that their discussions are protected by a NDA.  In the modern world information is both power and money so it is not surprising and entirely legitimate that organisations and individuals seek to protect their interests in this way.

In the field of employment law there are also legitimate reasons why both the employee and the employer might want to enter into a NDA.  For example, it may protect sensitive commercial information or set the framework for what might be a carefully negotiated settlement.

However, it has become increasingly clear that what can be an innocuous commercial tool is also being used in other ways that should cause us as a profession to stop and think.

This issue of NDAs first rose to prominence with the report in the Financial Times on 23rd October 2017 under the headline: “Harvey Weinstein; how lawyers kept a lid on sexual harassment claims”  That report details the experience of Zelda Perkins a former employee of Miramax.

Since then there have been other reports of NDAs used in ways that raise questions.  Several themes have emerged although they do not arise in every case: (1) the inequality of bargaining power; (2) lack of independent legal advice; (3) the use of terms that are unenforceable but seek to control the behaviour of someone who may not wish to take the risk of breaching the agreement. 

These reports have led many to conclude that NDAs are being used as a weapon to perpetuate sexual discrimination and protect the powerful from allegations of sexual harassment or worse.  The use of NDAs has therefore become an important issue in the #Metoo movement.   The House of Commons Women and Equalities Select Committee has just launched an inquiry into sexual harassment in the workplace where one of its areas of focus is the use of NDAs.

So far as a legal profession we seem to have responded to these developments with an embarrassed silence.   However this is a real issue where we have to begin to work through where the ethical boundaries sit.  Yes we have a duty to act in the best interests of our clients but this is subject to our duty to the court and the wider public.  We need to debate and understand where NDAs are appropriate and what terms are ethical.  This will ensure that NDAs are not used in the future both to damage the interests of women and, in turn,  damage the reputation of the legal profession.   We are uniquely placed to understand where NDAs are a force for good and on a practical level where to draw the line.   It’s time the profession took responsibility for this issue and #pressedforprogress.

IWD is an opportunity to build on the progress that has been made towards gender parity and to celebrate the achievements of women on a global scale. This year, #PressforProgress.

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