New Legislation to outlaw employers misuse of non-disclosure agreements

Kelly Franklin (Student)

A Non-disclosure agreement (NDA) also known as a confidential disclosure agreement (CDA) is a legal contract between at least two parties restricting the disclosure of certain confidential information to third parties. Many legitimate businesses including the government use NDA’s to protect confidential information.

Once a NDA has been signed it is a binding agreement (not to disclose information covered by the agreement) and a confidential relationship between the parties is created.

NDA’s are now referred to as ‘Gagging orders’ which were originally designed to stop employees sharing trade secrets when they moved to another company. They are regularly used by the rich and powerful alongside employee financial pay outs.  

This issue has been highlighted by the Sir Phillip Green case, owner of Arcadia Group-high street fashion brands such as ‘Topshop’ who is alleged to have used NDA’s to silence and pay off at least five members of his staff who have allegedly accused him of sexual harassment, racism and bullying.

Within Parliament Labour peer ‘Lord Hain’, under parliamentary privilege, named ‘Phillip Green’ as the individual in question as the media were subject to an injunction preventing publication of the full details of the story.

It has been suggested that NDA’s are being abused by some employers to intimidate whistle blowers and conceal harassment, discrimination, sexual assaults, physical threats and racism within the work environment.

As a result, the government are reviewing the law in this area and are considering new legislation making the misuse of NDA’s illegal in cases where victims have brought claims of sexual harassment. The intention behind this is to stop the silencing of victims to prevent them reporting serious crimes to the Police or other authorities.

To change the law around NDA’s and confidentiality clauses will bring fairness, safety, equality and a positive culture change within the workplace.

 

SULAC can provide free legal advice on all areas relating to employment law.

Please call 01782 94800 to make an appointment.

 

 

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