Non-disclosure Agreements

Debate between Tonia Antoniazzi and Sarah Russell

Wednesday 2nd April 2025 Westminster Hall

[Mrs Sarah Russell (Congleton) (Lab)]

Members who have heard me speak on these issues before—I do so a lot—know that I am a solicitor specialising in employment law. I am not currently practising, but I spent 13 years doing employment and particularly discrimination law work. A small amount of it was for small employers, but predominantly it was for employees. I have seen a lot of settlement agreements—pretty much every client I ever had ended up with one—and it is extremely unusual for them not to contain some form of NDA. The typical wording states that the person cannot discuss the terms of the agreement, nor the circumstances surrounding the termination of their employment.

There are too many difficulties to unpack in seven minutes, but one is that some of the people who put forward the agreements are not solicitors. A lot of businesses have a human resources adviser who is not regulated by the Solicitors Regulation Authority. Many of them are good people who do a good job of providing affordable advice to businesses; I do not want to universally condemn HR consultants. The reality is that at some point they will have been given a precedent settlement agreement by a solicitor—we might be talking 20 years ago—and those agreements contain NDAs, so they are still in widespread use.

As a solicitor, I would go back and say, “But if my client can’t say anything about the circumstances concerning the termination of their employment, what are they supposed to say to their new employer when they try to get a new job?” Some employers would agree to negotiate some sort of vague wording such as “left by mutual agreement”, so the person could at least say that, but some of them would just say flat out, “There’s money on the table. Your client can take it or leave it.”

But the client faces significant legal bills, and although the employment tribunals were hypothetically designed to enable them to represent themselves, the reality is that if it is a complex discrimination claim and they have a mental health problem—either because their claim related to it in the first place or because they developed one after they were treated so badly in their employment—they may not be able to face the prospect of an unrepresented employment tribunal claim. It is all well and good that the Solicitors Regulation Authority has said that people should not put forward NDA clauses, but they are still in extremely widespread circulation.

The flipside is that in order for someone to be persuaded to sign a settlement agreement, there is a requirement that the employer pays for them to have some legal advice. The standard legal advice offer is somewhere between £250 and £500, and for low-paid people the standard is still £250. The reality of the legal market is that no specialist employment lawyer will explain a potentially 20-page legal document to the person, send them follow-up written advice and renegotiate the terms for £250.

People on low pay can go to a lawyer who for £250 will perhaps take them through the terms of the agreement and explain what they mean, but then they have run out money, so that is the end of it. The terms are not renegotiated and the person just signs what is put in front of them. Senior execs can often afford the advice, which means they get it fully explained and totally renegotiated, so it is compliant at the end. A solicitor like me working against a solicitor on the other side who has put forward something that does not meet the SRA guidelines will say, “We’re not signing that—you know it’s not compliant. You’re in breach of your professional obligations, now get this off the table.” And they do—swiftly.

If a person has £250 and earns £20,000 a year, there is no way that they will pay for that level of top-up legal advice. That is not happening for them at all. Most good solicitors will explain that they cannot do it for the money and tell them how much it will cost to have it done properly. The person will not be able to afford it and, at best, they end up with some really shoddy solicitor who is not necessarily a specialist employment lawyer and is prepared to sign off pretty much anything and, bluntly, leaves them completely stuck. This payment structure is enriching for non-compliant solicitors at best.

There is, in theory, legal aid for people who are on very low wages or in receipt of certain benefits and who have equality claims, but that has been paid at such a low rate for such a long time that there are almost no providers whatsoever. Unless we significantly increase the hourly rate that we pay to providers, they will simply continue to hand back their contracts, which is what has happened in the majority of places. It is extremely difficult to access advice unless someone is a trade union member.

There are still lots of employers who regard all this stuff as just priced in. I have had clients come to me and say, “He’s absolutely notorious—the chief exec is a complete perv.” Everyone in the organisation knows it, but the board does not care. The board can give the women 20 grand to go away, they sign an NDA and that is the end of that. We have watched the chief exec do that time after time—it is just the cost of doing business. He is regarded as the superstar who brings home the bacon, so no one cares. Those are the fundamentals for many UK employers. At UKFast, for example, the chief exec got done for raping his staff. It had been going on for years: he did not just wake up one morning and do that to one woman. He was notorious in Manchester and lots of people knew what was going on. It happens across different organisations; there is no one specific sector.

[Tonia Antoniazzi (Gower) (Lab)]

My hon. Friend is making a fantastic speech and her experience is spot on. I have seen this culture of fear at the Welsh Rugby Union, where thankfully it no longer exists. Women are so scared to speak out, yet the culture of fear is perpetuated everywhere by the use of NDAs.

[Mrs Russell]

That culture is totally everywhere—across sectors. There is no specific sector where if we just sorted it out, the others would be all right. There is also the phenomenon of organisations that say publicly that they do not use NDAs, but I have seen their settlement agreements and can tell Members that they absolutely do. That is not at all unusual.

In summary, we have a systemic problem that is being used to cover up employment rights abuses across the board. We really do need to legislate and have standard wording that people cannot derogate from, whether they are lawyers, HR consultants or business owners. There are lots of good employers out there. I do not want anyone to think that I think all employers are terrible—I really do not: a lot of people are busting a gut to do the right thing by their employees—but we have to stop the use of NDAs.