Non-disclosure Agreements in the Workplace

Maria Miller Excerpts

Tuesday 5th September 2023 Westminster Hall

[Dame Maria Miller (Basingstoke) (Con)]

I beg to move,

That this House has considered the use of non-disclosure agreements in the workplace.

It is a great pleasure to serve under your chairmanship this afternoon, Ms Ali, for this important debate on the use of non-disclosure agreements in the workplace. I will start by talking about the importance of every one of us—each and every citizen of our country—to the productiveness of our society.

Working to support ourselves creates wealth. For those who are older or younger, it is an essential part of a vibrant and successful economy. We in Parliament agonise over producing laws to remove the barriers that can stand in the way of people going to work. We stop people being made redundant simply because they are pregnant, being fired for being too old, or being denied a job because they have a disability, and we stop employees suffering sexual abuse because of an abuse of power at work.

Yet we know from the evidence collected by organisations such as Pregnant Then Screwed, Maternity Action, WhistleblowersUK, Can’t Buy My Silence and many more that employers routinely use non-disclosure and confidentiality agreements to stop workplace wrongs being talked about, punished and put right. They use NDAs to silence employees who are fired or made redundant unlawfully. They stop them from seeking medical support for the psychological trauma that they have experienced, from taking action through employment tribunals, and in some cases from taking cases of criminal wrongdoing to the police. They remove people from their jobs with an exit agreement that includes a silencing clause, creating fear that talking about even illegal acts might mean they find themselves on the wrong side of the law, with the additional fear of having to pay back any payment they might have received when they departed from their job.

We know that there is a need for confidentiality at work. Routinely when we sign our contracts of employment there is a standard condition of confidentiality in the initial employment agreement. Some people therefore dismiss concerns about non-disclosure agreements because they know that NDAs can be unenforceable if they are put in place at the end of an employment contract. But most people are not legal experts. They cannot take the risk of being on the wrong side of the law and having to pay back any settlement agreement money, and employers know that.

The lawyers are part of the problem. The Solicitors Regulatory Authority has reminded all solicitors of their duty to uphold professional standards when dealing with NDAs. It issued a warning notice in 2018 that was updated in 2020. The SRA has been proactive and is to be applauded, but in reality the questionable usage of NDAs continues, first, because the SRA found that more than a third of law firms were not even aware of the 2018 notice—something that I am sure they are putting right—and secondly, because so many NDAs are drawn up by people who are not regulated by the legal profession, or maybe not regulated at all, and this is set to grow.

When I asked my office manager to ask ChatGPT to write me a standard UK severance contract after discrimination at work, a clause was automatically inserted that reads:

“Confidentiality: Both parties agree to maintain the confidentiality of this Agreement and not to disclose any details related to the discrimination claim or this Agreement to third parties, except as required by law”,

but no further details. How many people are now using these formula contracts as a matter of course? This might be the future of accessing legal expertise for many people, so we cannot rely on professional legal ethics and regulation to ensure that employers act in the right way. We need the law to be clear, too.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I thank the right hon. Lady for giving way and commend her on securing this topical and timely debate. Does she agree with me about the costs? No matter where it occurs in what sector, when we get into the public sector, public moneys are expended by some large employers. The likes of the BBC employs NDAs against employees and then subsequent former employees to try to buy silence over an agreed contract.

[Dame Maria Miller]

The hon. Member makes an important point about the use of NDAs by large public bodies. He mentioned the BBC, and I could go on to mention other media organisations. Indeed, NDAs have been used routinely in this place in the past. Mr Speaker and others, however, have ensured that that practice has stopped—it is possible to stop such things, if there is a will from the top.

The Government already know the importance of that point. The Secretary of State for Science, Innovation and Technology, my right hon. Friend the Member for Chippenham (Michelle Donelan), with the backing of the Department for Education, put in place a voluntary university pledge to stop the use of NDAs in university settings. It became law under the Higher Education (Freedom of Speech) Act 2023, through an amendment made on 7 February, so Parliament has had its say and the Government have accepted that say, but only in connection with universities.

The pledge, when it was introduced, protected students, staff and others from the use of NDAs in cases involving sexual harassment, discrimination and other forms of misconduct and bullying. If such a ban is good enough for universities, I hope that the Minister will agree that we can see no reason why employees in other sectors should not be protected in the same way.

The Government must look at how they could provide the same safeguards as the universities now have across every workplace in Britain against agreements drawn up by lawyers and those not drawn up by lawyers, which I believe to be the vast majority. As part of the pathway that the Government will follow in the coming months to achieve that sort of change, I hope that they will also support my amendment to the Victims and Prisoners Bill, which would recognise people who have signed NDAs as victims too, for consistency.

NDAs are of particular concern to Parliament and parliamentarians, because they are disproportionately used to silence women and minority groups, flying in the face of anti-discrimination laws, which have been in place for decades. Women report signing NDAs at six times the rate for men, black women at three times the rate for white women, and, interestingly, at 40% of the rate for people with disabilities. People with disabilities suffer such NDAs far more than anyone else.

A third of the respondents to the Can’t Buy My Silence data collection in the UK are believed to have signed an NDA. Perhaps worse, another third did not go ahead with seeking the justice they were owed, because they anticipated having to sign an NDA and did not want to—for fear of the consequences perhaps. In their 2020 sexual harassment survey, the Government themselves, through the Government Equalities Office, reported that 48% of those who reported workplace sexual harassment were asked to sign a confidentiality agreement about their experience, whether staying at the organisation or exiting it. The Government are aware of the scale of the problem and they have legislated already, as a result of actions taken here in Parliament. We cannot let the status quo stand.

Given the nature of NDAs—their silencing properties and the secrecy that surrounds them—only as a result of the bravery of some who have endured NDAs do we know the damage that they are causing. I pay tribute to all those people—such as those in the Public Gallery and those Members—who have spoken out bravely publicly or privately on this matter. That includes the public reporting of the Independent Television News newsroom incidents, including multiple reports of NDAs by “Channel 4 News” and “Channel 5 News”.

A particular concern—the hon. Member for East Londonderry (Mr Campbell) has already made the point about media outlets—is that organisations that provide news for millions of viewers are using NDAs to cover up allegations of sexual harassment, disability discrimination, maternity discrimination and much more. Even after public reporting, those are yet to be resolved. The concern is that we rely on such news organisations to expose the truth, and yet all summer we have seen more and more media reports about the toxic environments that have flourished.

I too have been approached by a number of whistleblowers at a number of ITN newsrooms. Why? Because of the lack of transparency and the fear of speaking up created by the use of apparently legal confidentiality clauses or NDAs. I believe that NDAs have no place in British workplaces if they stop people from freely exercising their rights under the law.

[Peter Grant (Glenrothes) (SNP)]

I commend the right hon. Lady on an outstanding speech; I have no doubt that the rest will be equally outstanding. Does she agree that it is utterly hypocritical for the owners of news agencies, whether in broadcast or print media, to hide behind secrecy when it comes to how they treat their own employees? They make a living from exposing the things going on in other companies and from getting information from Governments that Governments do not want to disclose.

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[Dame Maria Miller]

The hon. Gentleman brings up an important point. How employees are treated goes to the very heart of the culture of an organisation; we can judge an organisation on how it treats the people who work for it.

My strong feeling is that we need to show leadership on the issue of NDAs. We need to make it clear from this place that such agreements have no place in the British workplace. It is regrettable that some organisations appear to be using NDAs to silence their employees. I sometimes wonder how transparent that is to the management of the organisations. Senior managers need to be asking some serious questions of their HR departments about how such agreements are drawn up.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I thank the right hon. Member for her initiative in bringing forward this debate; I absolutely agree with every word that she has said and how she has put the case. I say to the Minister that if he does what the right hon. Member is asking, we will give our full support. At this stage in a Government it is sometimes difficult to do good, but if he accedes to the right hon. Member’s proposals he could do a major piece of good.

Non-disclosure agreements are unfair on the individual. As the right hon. Member said, backed up by figures, they double down and are a ratchet on discrimination. As she also said, they are perilous for the organisations, as covering up wrongdoing introduces rot. Whatever words, written by the civil service, are in the Minister’s extremely good brief, he should have a think about doing this. He will get wholehearted support from us. The right hon. Member is putting forward a really sensible case, and I thank her for that.

[Dame Maria Miller]

I thank the right hon. and learned Lady, the Mother of the House, for those kind words of support. This is not a political issue; that is really important.

I couched my opening statement in terms of productivity because what really offends me to the core is that good people are being put out of employment for the wrong reasons. That often undermines their confidence and career in a way that they find it difficult to come back from, although there are notable examples of when that has not been the case.

I am thinking in particular of the evidence given to the Women and Equalities Committee for our maternity discrimination report, in which the hon. Member for Birmingham, Yardley (Jess Phillips) played a part. We heard about people being pushed out of employment simply because they were pregnant. They then found it very difficult to get back into work afterwards. The issue has real consequences for our economy. I know that the Minister feels strongly about the importance of productivity; what we are discussing is part of the piece that we need to get right.

Can’t Buy My Silence, the organisation that brought in the universities pledge, is working on a similar voluntary agreement for businesses to stop using inappropriate NDAs; perhaps that fills a vacuum created by the many consultations going on at the moment, in both Government and other organisations. That business pledge is to be welcomed. The organisation has been shown to be powerful in turning its words into law. The pledge commits a business not to using non-disclosure agreements or clauses to silence people who raise complaints of sexual harassment, abuse or misconduct, discrimination, retaliation, bullying or other harassment, at the point of hiring, at termination or at any other stage. The organisation, very ably led by Zelda Perkins, has secured its first supporters, including a law firm, which I think shows the strength of the way the pledge has been put together and put to businesses.

When the Secretary of State for Science, Innovation and Technology, in her time as Minister responsible for higher education, brought in the universities pledge, she said of the use of NDAs that she was

“determined to see this shabby practice stamped out on our campuses”.

I hope that the Minister replying today—I know my hon. Friend well—will wish to see this shabby practice stamped out across the whole economy, too.

Most confidentiality agreements are put in place by people other than lawyers. Other regulatory bodies have issued guidance on NDAs, as we would expect. Acas advises that NDAs should not be used

“to cover up inappropriate behaviour or misconduct, especially if there’s a risk of it happening again”.

The Chartered Institute of Personnel and Development, the body for human resources professionals, recognises that NDAs should not be used to silence people in situations of harassment, discrimination or bullying and organisations should never exert pressure on someone to sign. But the evidence of the scale of the problem shows that the advice is simply not cutting through—it is not enough. Many employers relying on the online model agreements to which I referred earlier are simply perpetuating a cycle in which NDAs, confidentiality clauses, are seen as the norm, to silence victims of wrongdoing. Therefore it is time that we turned advice and encouragement into law—I think there are very clear indications that organisations such as the Bar Council are also seeing that as the way forward and I am sure the Minister will be aware of that—so that apparently legal clauses in legal contracts cannot be used by anyone, lawyer or not, to cover up illegal wrongdoing at work.

My determination to see change on this issue stems in no small part from an interview that I saw with Zelda Perkins on “Newsnight”, which was followed by the 2019 report by the Women and Equalities Committee—I chaired it at the time—on non-disclosure agreements. The evidence given to the Committee during that inquiry left me in absolutely no doubt that this was an issue largely under the radar and urgently in need of legislative solutions. The debate today is to remind the Government of the issue and of the need to act.

I believe in a fair society in which each of us has the opportunity to reach our potential, especially in education and in work; that is the society that we should all be striving for. Equally, I believe that it is the role of Parliament to remove the barriers that people encounter in achieving that aim. Non-disclosure agreements are a barrier to people reaching their full potential at work, a barrier to fairness and a barrier to the laws that we pass in this place working in practice. They must be outlawed where they cover up illegal wrongdoing. I hope that the Minister replying today can agree that the status quo is not an option.

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[Layla Moran (Oxford West and Abingdon) (LD)]

It is a pleasure to serve under your chairmanship, Ms Ali. I start by congratulating the right hon. Member for Basingstoke (Dame Maria Miller) on securing this important debate. As we have heard, non-disclosure agreements were designed as a legal tool to protect trade secrets, but they have a dark side. There is now overwhelming evidence that they are being used to cover up bad behaviour, and buy victims’ silence. They have become insidious and pervasive. One survivor described it as

“a way of companies and people avoiding accountability”.

NDAs can take many forms. They can be stand-alone agreements or a single clause subtly included at the end of a contract generated by a lawyer or anyone else. The effect is what is important. An NDA for these purposes should be defined as any clause that has the effect of gagging a victim. It is usually in perpetuity, which itself is extraordinary when thought about in legal terms. It stops them speaking about their experiences for ever more.

Many NDAs are not legally enforceable, but the victims I have spoken to would not have a clue. They never have a clue—and I am not sure I would, frankly. I am not a lawyer. If I were given something on official headed paper and told that someone knowledgeable had looked at it and thought it was the best thing for me, and I was at my wits’ end at the end of a discrimination case, I would just want it all to go away, too. That is tempting, and we can understand why people in that moment—when presented with that way out—take the money, sign the NDA and run.

However, we also know that NDAs hold immense power over victims. Often many years later, long after the effects should have been forgotten, they are retraumatised over and over again. Imagine someone facing a discrimination charge at work who has had to leave. They then have a further interview where they are asked about why they left, and they cannot say. Over and over again, forevermore, they are forced to remember. Many are victims of NDAs; I put it in those terms specifically because NDAs themselves cause harm. The point is made by the right hon. Member for Basingstoke in her amendment, which I very much support, to the Victims Bill: in these cases, it is the NDA itself—the silencing—that is traumatising.

I was involved in this campaign initially through students. I am delighted that through cross-party support we had an amendment accepted to the Higher Education (Freedom of Speech) Act 2023; that is amazing. One of the young women I spoke to was a victim of sexual assault in her college. She was assaulted by another student. She was presented with what looked like an official document—it was not actually a legal document at all, but she did not know any different. There was essentially a gagging clause. Some clauses said that the assailant was not allowed into her accommodation or where she ate, which we absolutely support. However, a final clause said that she could not speak about her experiences publicly at all. When it was discussed at the time, it was sold as a way to protect her reputation. She should not have been talking about it on social media or Lord knows what damage it would cause to her later. Not only is that infantilising to a women—albeit a young woman, but an adult woman none the less who has the right to make her own decisions—but let’s face it: the reputation being protected in this case was that of the university and the college.

[Dame Maria Miller]

I thank the hon. Lady for giving way and for her support today. She talks about the importance of protecting reputations. The reason why employers sometimes say that they want a non-disclosure agreement signed is that it will save an individual leaving a company and starting to talk badly about those left behind. Surely, we already have laws on defamation that cover that, so that is not a very good argument. Does she agree?

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[Jess Phillips]

Hear, hear. The data laid out by the right hon. Member for Basingstoke made it very clear not just the gender imbalance in those affected by NDAs, but that black women are much more greatly affected.

[Dame Maria Miller]

I want to reflect on the hon. Lady’s response to the Minister. Time is very tight, but does the hon. Lady agree that part of the problem is the lack of transparency about whether clauses are legally enforceable? Employers can, maybe unintentionally, mislead their employees into thinking that they cannot speak out. Unfortunately, we are not all lawyers, and sometimes we err on the side of caution; we do not want to break the law.

[Jess Phillips]

The right hon. Lady is absolutely right. I have met women who said, “I can’t tell the police. I can’t speak to people.” I am, like, “You can.” I had to get the Speaker to write a legal letter saying that people could speak about this to their Member of Parliament.

My time is up, but I think I have made my point. I finish with this: we rely on media organisations to do the work of cleaning up businesses for us. We rely on victims to come forward, and media organisations to report that. From what I know about media organisations, I am not entirely sure that it should not be the Government who lead on this issue.

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[Kevin Hollinrake]

I will come on to some other points on that issue, including on the guidance that we have given to ACAS in that area.

NDAs cannot prevent workers from reporting a crime to the police or from co-operating in a criminal investigation, because such a clause would be unenforceable—[Interruption.] I may have misheard what the hon. Member for Birmingham, Yardley said, but it is very important that anybody listening to this debate, who is considering what their rights are, knows very clearly that such an agreement cannot prevent them from reporting a crime in this area.

Furthermore, the use of an NDA by an employer could amount to a criminal offence—for example, if it is an attempt by the employer to pervert the course of justice or conceal a criminal offence. Independent legal advice is a requirement for settlement agreements to be valid.

In 2019, the then Department for Business, Energy and Industrial Strategy consulted on the misuse of NDAs in an employment context. The consultation followed evidence found by the Women and Equalities Committee that individual workers may not be aware of their existing statutory rights and may be intimidated into pursuing claims even where the NDA is unenforceable—a point raised by the hon. Member for Oxford West and Abingdon. Again, my right hon. Friend the Member for Basingstoke does very important work in that area.

The consultation also heard evidence that individuals are pressured into signing NDAs without the appropriate legal advice, and therefore do not understand that their NDA is unenforceable. That is why the Government took action in developing extensive guidance, which was published by the Equality and Human Rights Commission and ACAS. It is clear that NDAs should not prevent individuals from making disclosures to the police and medical or legal professionals.

We have already legislated to prevent higher education providers using NDAs, as I said. We are keen to see how that works in practice, and it will come into force in 2024. The Government held a consultation on the matter in a wider context in 2019. We all agree that these agreements should not be used to intimidate individuals or conceal criminal conduct or illegal wrongdoing, as pointed out by the hon. Member for Strangford (Jim Shannon). I point out to him that it is in the capability of the Northern Ireland Administration to implement that in Northern Ireland if they choose, with the matter being devolved to Northern Ireland.

[Dame Maria Miller]

The Minister wants to do the right thing. He wants to be a role model; he wants to be a good employer; he wants to set the tone. Will he meet me and Can’t Buy My Silence and consider signing its voluntary agreement to stop the use of NDAs? Surely the Government can lead the way on this.

[Kevin Hollinrake]

Of course I will meet my right hon. Friend, and I am very happy to meet the campaigning organisation as well. The consultation found some support for NDAs when they helped victims to make a clean break and move on—I think that point was also raised by the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders). We feel that an outright ban across all organisations may therefore not be appropriate and could have unintended consequences for employees.

The Government have listened carefully to the experiences shared through a consultation on sexual harassment. We are legislating through the Worker Protection (Amendment of Equality Act 2010) Bill, first introduced in the Commons by the hon. Member for Bath (Wera Hobhouse), which will strengthen protections for employees against workplace sexual harassment by placing a duty on employers to take reasonable steps to prevent sexual harassment of their employees.

Protecting and enhancing workers’ rights while supporting businesses to grow remains a priority for this Government. We are clear that the use of NDAs to intimidate victims of harassment and discrimination into silence cannot be tolerated. We are already taking action in the higher education sector; we have published extensive guidance and consulted on the use of NDAs in the workplace; and we are carefully considering how to tackle wrongful practices in a wider context.

[Dame Maria Miller]

To sum up briefly, I thank everybody who has taken the time to be here today, including the Minister; I know he has, importantly, strong feelings about this subject and he is a good advocate for us. The debate has shown that the misuse of NDAs is a matter not of party politics, but of fairness, justice and the rule of law. All political parties in this place subscribe to that, and I know that the Government will be listening to that carefully. I hope that we will hear more news on the subject—maybe in the King’s Speech, and in other legislative programmes the Minister brings forward.

Question put and agreed to.

Resolved,

That this House has considered the use of non-disclosure agreements in the workplace.