The Women & Equalities Committee of the House of Commons has produced its report on “The Use of Non-Disclosure Agreements in Discrimination Cases” an extract of which is set out below:


"The difficulties of pursuing a case at employment tribunal and the substantial imbalance of power between employers and employees, mean that employees can feel they have little choice but to reach a settlement that prohibits them speaking out. Our Report shows unequivocally that in many cases signing a non-disclosure agreement is not benign."

The Committee stated that the government needs to clarity the rules of whistleblowing and to tackle the financial barriers employees face when trying to take cases to employment tribunals when forced to sign NDAs forfeiting those rights.

The report comes as dozens told the BBC they were "harassed" out of their jobs and made to sign NDAs after raising complaints about discrimination, bullying and sexual misconduct in the workplace. More than 90 people wrote to the committee sharing their experiences.

The report also contains many recommendations which include:

  • require standard, plain English confidentiality clauses in settlement agreements;
  • consider one-way cost shifting (so the employer is more likely to be ordered to pay the employee's costs);
  • massively increase damages for non-pecuniary loss;
  • increase the time limit for bringing a discrimination claim from three months to six months;
  • require employers to pay the cost of employees seeking legal advice, and of negotiating the terms in a proposed settlement agreement, regardless of whether the agreement is eventually signed or not;
  • 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 (not HR) at board level or similar to oversee anti-discrimination and harassment policies and procedures and the use of NDAs in discrimination and harassment cases.

Many of the recommendations in the report are sensible and long awaited.  But although the Committee touches upon the benefit of settlement, a point that it fails to consider is that many employers simply will not settle unless they can ensure confidentiality.  Many of the settlement agreements I see on a daily basis states that employees cannot disclose information regarding their employment including the events leading up to the termination of, circumstances surrounding their termination, the conversations regarding the negotiation of the settlement agreement, the settlement agreement itself, just to name a few.  For those employees who refuse to sign, the employer might otherwise prefer to chance it and contest the allegations bought in a Tribunal.

For help and advice on matters such as this or any other employment matter please contact Emma Hewitt on 0808 166 8860 or email e.hewitt@sydneymitchell.co.uk

UK Top Tier Firm 2017 Lexcel Practice Management Standard Birmingham Law Firm of the Year for 2011 Resolution Collaborative Family Lawyer
The Law Society Accredited in Family Law Conveyancing Quality Scheme