In the wake of #metoo, the use of Non-Disclosure Agreements is coming under increasing scrutiny.
NDAs typically get used in the employment setting where an employee has raised a concern and receives a payment from the employer in settlement of that concern and to prevent the employee from making those allegations public.
The conflict over NDAs arises where the employee believes that they cannot speak to the police, a lawyer or, if relevant, a regulator about the issue. Commentators say that NDAs allow serial harassers to get away with misconduct again and again.
However, there is a balance to be struck because, realistically, some element of any compensation paid by an employer will be for the employee's silence on a matter. In some cases an employer won't be willing to pay much at all if the employee is free to speak to the media the next day. In some cases too, speaking to a regulator can have the same effect as speaking to the media.
The latest suggestion from the government is a new law requiring individuals to take independent legal advice on the limitations of NDAs when entering into one. Obviously that already happens in an employment law settlement agreement. It will be interesting to see what that proposal looks like when implemented, but query whether it will make any difference in a settlement scenario.
More problematic for employers will be the increasingly common use of non-disparagement clauses in employment contracts - is that an NDA by disguise?
Bosses who impose gagging orders on employees over actions such as sexual harassment would have to allow staff to receive independent legal advice under proposed reforms.