The solicitors’ professional body has called on the government to tighten legislation governing non-disclosure agreements, to prevent their misuse in silencing victims of workplace bullying and sexual harassment. In addition to that the Financial Conducts Authority (FCA) has pledged to continue their crackdown on non-financial misconduct.
The Law Society of England and Wales said the legal framework and the enforcement process for NDASs also need improving, to ensure they “do not discourage matters of public interest such as some whistleblowing cases from being reported”.
“We urge the government to commit to making it harder for NDAs to be misused when they involve settling issues around workplace harassment or discrimination,” the society’s president, Lubna Shuja, said. The government needs to fulfil its promise to legislate so that no provisions in a confidentiality clause can prevent disclosures to the police, health, legal or care professionals. This will make it harder to bury unacceptable behaviour.” The Law Society’s comments come in response to an investigation by the Legal Services Board’s (LSB) into the role lawyers play when companies use NDAs to conceal wrongdoing in the workplace. The group said that someone who suffers harassment “must still be able to seek compensation for the harm they’ve experienced.”
Shuja added: “If the case has a public interest aspect, it should be enforced by a separate body that encourages work environments to be free from harassment.” The LSB’s probe comes as an increasing number of workplace sexual harassment and bullying allegations emerge in financial services.
In London’s financial district, the most high-profile recent cases concern 19 allegations against hedge fund manager Crispin Odey, all of which he denies, and the widely reported allegations of sexual harassment at the Confederation of British Industry which led to the dismissal of the director general, Tony Danker, last May, following separate allegations about his conduct although he claimed his sacking was unfair.
A Freedom of Information Act request recently revealed the Financial Conduct Authority has received 189 allegations or complaints since July 2021 about financial services workers’ behaviour. Bullying, harassment and physical aggression accounted for 81 of the complaints, while another 40 related to sexual misconduct.
Bellevue Law barrister Georgina Calvert-Lee previously said that firms use NDAs to silence legitimate claims from staff that would be damaging. The agreement would prohibit staff from speaking about a matter or publicising it in any way. Those signing are offered a settlement in return.
“Some may want to protect (an alleged perpetrator) because he may be the boss or founder. He could be a great rainmaker who brings in lots of money. And so they know he misbehaves a lot of the time and they want to shut the person up because, of course, it is reputationally damaging,” Calvert-Lee said.
Data provided from non-profit Speak Out Revolution shows that 56 per cent of City (financial district) workers who lodged a formal complaint of unfair dismissal ended up leaving the company.
In its call for evidence, the LSB noted “evidence of misuse of NDAs to conceal unlawful activity, such as discrimination, harassment or abuse.” In these instances, lawyers can be asked to enforce or advise on what amounts to an unethical or illegitimate use of NDAs, the board added.
Shuja said that solicitors are obliged by their code of conduct to act in their clients’ best interests, but noted the Solicitors Regulation Authority also has guidance prohibiting the misuse of the NDA. “Those who advise on NDAs know they must meet good ethical standards otherwise they could face enforcement measures for non-compliance with legal requirements.” (The writer is our foreign correspondent based in the UK)
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