A Non-Disclosure Agreement (NDA) is a legal contract between two or more parties. It signifies that the relationship between them is confidential. Once signed, it is a legally binding contract. Therefore, the parties are bound to keep any dealings and details of those dealings to themselves. NDAs have become more popular in the 21st century; this is often due to commercial entities wanting to keep their transactions out of the public sphere. This could relate to mergers and acquisitions, for example. It is also common to have an NDA between an employer and their employee. This is, again, common and used to protect secret information within an organisation. The NDA prevents an employee either passing such information to the press or their employer's competitors, even once they have left their position in the company.
NDAs serve a valid commercial purpose and are useful for entities that wish to keep their genuine business transactions private. However, NDAs have been subject to criticism recently. There are concerns that NDAs can be used as a means of covering up illegal activity. This is to ensure that a company’s reputation is protected and potentially hindering a full investigation into any allegations. In particular, there have been calls to ban NDAs from Harvey Weinstein’s former assistant, Zelda Perkins. This call applies to NDAs in the workplace and follows on from the recent allegations of misconduct from Sir Philip Green. There have also been well documented allegations against Harvey Weinstein. This saw the #MeToo movement spring into life.
Sir Philip Green was recently revealed to be at the centre of allegations of sexual and racial abuse. Previously, he had been protected by an injunction that had been granted by the Court of Appeal which prevented his name being released into the public sphere. Sir Green’s involvement was leaked shortly after as a result of the use of ‘Parliamentary Privilege’ by Lord Hain, who felt that it was in the public interest to do so. Parliamentary Privilege is essentially an immunity given to members of Parliament, which protect them against civil or criminal liability for things that they say or do, which are made in the course of their legislative duties. Although the media were prevented from reporting Sir Green’s name, the Telegraph and the media were then entitled to report Lord Hain's statement in Parliament, even though the injunction had been issued by the courts. Sir Phillip Green hit back at the breach of the injunction, wholly denying the allegations made against him.
The argument from Ms Perkins is that the use of NDAs should be considerably restricted by legislation within the United Kingdom. Interestingly, the government is reportedly considering prohibiting NDAs about sexual harassment in the workplace, but Ms Perkins called for the ban to be much wider. Concerningly, the use of NDAs has increased, particularly against women. The disproportionate number of women aged between 18 – 24 are likely to be the victims of such harassment. It must be noted that this is not a call for a total ban on such clauses; the suggestion is to make NDAs illegal when used to cover up any type of crime committed in the workplace. This would extend to racial or sexual abuse, bullying, discrimination or environmental incidents that are subsequently covered up. It is apparent that in such circumstances, NDAs serve as a significant inhibition to the victim’s right to freedom of expression.
The current issue before Theresa May and the Conservative government poses many challenges. On the one hand, there is the need to prevent criminality being protected from the use of NDAs and ‘paying off’ former employees. On the other, there is a need to respect that legitimate commercial entities are entitled to keep their dealings private. When debated in Parliament, it is crucial that this balance is struck correctly; a failure to equally balance these interests would generate further concerns for an already problematic area. If NDAs are blanketly rendered illegal, this would act as a deterrent to a wide variety of businesses wishing to conduct operations in the UK. This could possibly be at the expense of the UK – such companies would want to take their business elsewhere to ensure privacy is maintained. However, if the scope of NDA scrutiny is too little, victims of harassment will be forced to choose between suffering in silence or risk being sued for coming forward about their experiences.