Settling workplace disputes – “the NDA”

With the recent reports of the British billionaire businessman's use of non-disclosure agreements ('NDAs') in cases of alleged sexual and/or racial harassments in the workplace, the NDAs and their use within the employment context are back in the spotlight.

It has been an acceptable standard practice to include confidentiality provisions or non-disclosure agreements in contracts of employment and settlement agreements. These often refer to technical or client related information in order to mainly protect the interests of the business. Whilst the use of confidentiality clauses are essential in creating mutually respected confidentiality obligations on both parties in employment settings, the widened use of settlement agreements (often referred to as NDAs) has been perceived as a 'cover up' for employers alleged of misconduct and harassment in workplace.

As well as setting out the general terms of the agreement, settlement agreements often include clauses to cover the circumstances surrounding the termination, including any allegations made or grievances raised during employment, which could include provisions in relation to sexual harassment or other wrongdoing.

However, NDAs cannot prohibit someone from making a protected disclosure for the purposes of the whistleblowing legislation, or giving evidence in a court case, and by including such provisions the entire agreement could be void. Furthermore, if the NDA's aim is to preclude the disclosure of serious wrongdoing, in the presence of genuine public interest, the NDA could be deemed unenforceable.

Although the 'inappropriate' use of NDAs has been challenged by various political figures and the press, their proper use will not be diminished within the employment context. However, they are often used as a last resort in cases of misconduct.

This highlights the importance of implementing and practising good employment policies and practices, including zero-tolerance policies on certain types of behaviour or language in workplace. Training your employees and dealing with grievances in a professional and timely manner could avoid potential claims for unfair dismissals or discrimination cases which will not only save the business from financial losses, but will also protect its reputation.

At Rollits, we regularly advise employers and employees on settlement agreements and have a dedicated employment team with vast amount of experience. Call us NOW to find out how we can help you and your business.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.