WESC publishes report on use of non-disclosure agreements to settle discrimination claims

The Women and Equalities Select Committee has published a report criticising the use of non-disclosure agreements by employers to "routinely cover up" and settle allegations of unlawful discrimination and harassment. The report states that many employees feel they have little choice but to accept a non-disclosure agreement (NDA) due to the imbalance of power in the employment relationship.

The report sets out the following four recommendations to the government:

● ensure that NDAs cannot prevent legitimate discussion of allegations of unlawful discrimination or harassment, and stop their use to cover up allegations of unlawful discrimination, while still protecting the rights of victims to be able to make the choice to move on with their lives;

● require standard, plain English confidentiality, non-derogatory and similar clauses where these are used in settlement agreements, and ensure that such clauses are suitably specific about what information can and cannot be shared and with whom;

● strengthen corporate governance requirements to require employers to meet their responsibilities to protect those they employ from discrimination and harassment; and

● require named senior managers at board level or similar to oversee anti-discrimination and harassment policies and procedures and the use of NDAs in discrimination and harassment cases.

The WESC has repeated its previous recommendations to give tribunals the power to award punitive damages in appropriate cases, introduce a presumption that employers will normally be required to pay employees' costs if the employer loses a discrimination case in which sexual harassment has been alleged, and to significantly increase the Vento bands which set the level of compensation for injury to feelings.

Some of these recommendations have already been rejected by the government. However, the government has committed to considering the use of NDAs. We are currently awaiting the response to its consultation on the misuse of confidentiality clauses in harassment and discrimination situations which closed on 29 April 2019. Please click here for a copy of our report on the government's consultation proposals.