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Government reforms (1):  Non-disclosure agreements (NDAs) – Response to WESC report

What do we already know?

In June 2019, the Women and Equalities Select Committee (WESC) published its report on the use of confidentiality clauses, which are also known as Non-Disclosure Agreements (NDAs), in discrimination and harassment cases. The WESC concluded that the imbalance of bargaining power between employers and employees is a key driver behind the widespread use of NDAs, and made 45 recommendations for ensuring NDAs do not prevent legitimate discussion around, and investigation of, sexual harassment and discrimination.

We also updated you in our August 2019 Newsletter, Government Reforms (3): Response to Consultation on Confidentiality Clauses, that the Government had issued a response to its own consultation on the use of NDAs in employment contracts and settlement agreements.  This response included commitments by the Government to introduce:

Also, we updated you in our October 2019 Newsletter, New guidance – 2. EHRC Guidance on NDAs in Discrimination cases, that the Equalities and Human Rights Commission (EHRC) produced guidance on using NDAs in discrimination cases.

What’s new?

The Government has published its response to the Women and Equalities Committee’s (WESC’s) report on the use of non-disclosure agreements (NDAs) in discrimination cases, available here.

Overall, the Government agrees that the use of NDAs to cover up cases of sexual harassment and discrimination is unacceptable and that they are used to silence and intimidate victims. However, the Government considers there is a legitimate place for NDAs within employment contracts, although that the right balance must be achieved between allowing legitimate use and preventing misuse.

Although the Government’s response to the WESC’s report restates much of what we know already (from its response to its own consultation on this (as described above), it also addresses some additional points.

What will the Government do on NDAs?

The Government restates that it will:

As well as these steps, the Government also commits to taking forward WESC’s recommendations to:

The Government has also committed to considering further the following recommendations:


What will the Government not do on NDAs?

However, the WESC recommendations that the Government says it will not be taking forward include:

Comment: The WESC may be disappointed by the limited number of its recommendations that the Government is immediately taking forward. However, WESC’s recommendations did address issues wider than regulating NDAs and the Government has already taken some steps.

With an imminent general election on 12 December 2019, it is difficult to predict when we will see further progress in this area and what the proposed legislation will look like.  We’ll be sure to update you when we have more news on this.

We do not expect that the coverage of NDAs by the requirement to take legal advice ought to increase the legal costs associated with settlement agreements.  Our experience is that lawyers already always include any NDAs present in their existing advice and costings.

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