New ethical challenges surrounding gagging orders in the #MeToo era

15 May 2018

The ethical obligations of solicitors change over time.  What was acceptable 20 years ago may no longer be so today. This is demonstrated starkly by the recent sea change in attitudes to Non-Disclosure Agreements. 

Until last year these were considered a perfectly normal part of employment practice.  Now serious concerns have been raised that they are a tool to cover up sexual misconduct and to hide discrimination in the workplace.  The shift has occurred in the context of the #Metoo movement which, in turn, has led many to speak about their experience of NDAs.  Prominent examples are Zelda Perkins who entered into an NDA with Miramax and “hostesses” at the President’s Club dinner who were required to sign NDAs at the start of their shift without any opportunity to consider, take advice, or even read the document.

The concerns around NDAs generally have led the SRA to issue a warning notice. Whilst this seeks to clarify the existing obligations of solicitors, it is never that simple.  Clearly, some use of NDAs in the past was unethical and in breach of the SRA’s Code of Conduct. However it is also obvious that the goal posts have moved.  The more difficult question is where have they moved to. 

UCL’s Centre for Ethics and Law has undertaken a project sponsored by Kingsley Napley to try and answer these questions. This started with a workshop debate attended by leading practitioners in employment law and law firm risk management and has led to a paper entitled Ethics and NDAs, which begins to suggest where the boundaries lie in relation to ethical NDAs.

The paper identifies the following areas that are particularly problematic:

1.       Restrictions on reporting to the police, regulators and other authorities.

2.       Limits on the ability of the individual party to seek professional advice or counselling after entering into the agreement.

3.       Clawback / forfeiture clauses under which in the event of confidentiality breach, settlement monies may be required to be repaid.

4.       Terms that are legally potentially unenforceable – e.g. blanket confidentiality provisions and clawback provisions, or making any “protected disclosures” under whistleblowing legislation.

5.       Restrictions on keeping a copy.

It is clear the legal profession needs to rethink the way NDAs are used in future. The public’s attitude to these agreements has changed and we face a significant ethical challenge as a profession if we don’t get the parameters of NDAs right. 

The UCL project is useful in that it has summarised a thoughtful and detailed debate but its impact will be greater if it is taken up by those groups who can develop guidelines of acceptable practice for the whole profession, most notably The Law Society.  We must urgently adapt our practices to ensure we remain ethical on NDAs.  If we do not do this, then it is likely that the Government or others will do that for us. 

This first appeared in The Times law section on Thursday 10 May 2018.

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