Rule of law: UK government acts to curb use and abuse of NDAs
Following repeated scandals revealing the widespread use and abuse of non-disclosure agreements, the UK government has given the green light to ban their use in England’s higher education sector, whilst also considering a broader ban to prevent their misuse by employers more widely.
The implementation of the Higher Education (Freedom of Speech) Act 2023 was put on hold following the country’s 2024 summer general election and the government will introduce a revised version later this year. Crucially, it will include a ban on drafting non-disclosure agreements (NDAs) to silence victims of bullying, harassment or sexual misconduct on campuses – a move welcomed by campaigners calling for greater legislative action against the misuse of NDAs.
Similar legislation came into force in 2023 in Ontario, preventing universities there from using NDAs to cover up sexual harassment. In the UK, the legislation will only apply to England as education is a devolved issue.
In March, during a debate in the UK’s House of Commons, a number of members of parliament argued that NDAs shouldn’t be used to silence victims of workplace misconduct. They were discussing the matter in the context of amendments put forward to the country’s Employment Rights Bill, which is currently at committee stage in the parliamentary process. The government has said it will review the Bill ‘closely’. The debate has raised the prospect of a broader ban to prevent the misuse of confidentiality agreements by employers more widely.
As scandals – such as Weinstein, Fayed and the Post Office – have shed light on the detrimental impact that NDAs have on the administration of justice, their enforceability is increasingly being challenged. Geraldine Clarke, a Member of the IBA Constitution and Governance Committee, says increased regulation has made lawyers ‘more cautious now about advising a client to seek an NDA.’ She stresses that lawyers must always ‘act in a way that upholds the rule of law and proper administration of justice.’
Jonathan Price KC of Doughty Street Chambers in London says the miscarriages of justice involving hundreds of Post Office operators would have come to light much sooner had it not been for the widespread use of NDAs in settlement agreements. ‘The only way of connecting the dots was to compare their experiences, but they were prevented from doing that if they settled their cases,’ he says.
Lawyers are more cautious now about advising a client to seek an NDA and they must act in a way that upholds the rule of law and proper administration of justice
Geraldine Clarke
IBA Constitution and Governance Committee
In a bid to prevent this type of cover-up, there have been proposals to establish a central authority to register NDAs before they can be enforced. Mark Stephens CBE, Co-Chair of the IBA’s Human Rights Institute, suggests such an initiative could be effective. ‘One of the challenges is around where there are multiple NDAs about an individual’s behaviour,’ he says. ‘Once people join up the dots to show that actually there are multiple NDAs with this one individual they suddenly realise and have the courage or feel that they can come forward to stop that behaviour reoccurring.’
Other jurisdictions have sought to legislate against the misuse of NDAs. By the end of 2024, twenty-two US states had introduced laws limiting their use, including in respect of NDAs linked to allegations of workplace sexual harassment and discrimination.
In Canada, following campaigning by not-for-profit Can’t Buy My Silence, Prince Edward Island legislated in 2021 to limit the use of NDAs in sexual misconduct cases. Similar bills have been proposed in several other Canadian provinces. A bill banning government and federally funded agencies from enforcing NDAs to cover up misconduct has also been mooted.
In Autumn 2024, Ireland’s Maternity Protection, Employment Equality, and Preservation of Certain Records Act brought significant changes to the country’s legislation on employment equality. These changes restrict the use of NDAs connected to allegations of discrimination, victimisation, harassment or sexual harassment, but do not preclude the use of NDAs to protect trade secrets.
Nevertheless, Richard Dudelzak, Vice-Chair of the IBA Professional Ethics Committee, says NDAs still have a legitimate role in the workplace, provided they’re not covering up criminal misconduct. ‘NDAs still provide a necessary tool for parties to settle any issue of confidentiality between them without having to have recourse to our court system,’ he says.
Michael Fandel, an Officer of the IBA Professional Ethics Committee, says that if NDAs are used, a good practice ‘is to state that the person signing the agreement has consulted with counsel, or been given the opportunity to do so, prior to signing.'
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