The use of NDAs in employment disputes has been a sensitive topic for a number of years. There has been a number of debates over whether such practices of using NDA’s should be outlawed.
It’s estimated thousands of UK employees have signed NDAs in exchange for financial settlements that make sexual misconduct allegations ‘disappear’. However, once they have agreed to a gagging order, they may face severe financial penalties if they do decide to go to the police. Some people argue that nobody has to sign an NDA if they don’t want to, but the power imbalance in the workplace can make it difficult for them to refuse, while others sign their voice away due to the financial and emotional pressures of the situation.
While others may point out that NDAs protect the victim as well, but they only protect the victim because of the current climate. There shouldn’t be any shame or fear about calling out bad behaviour, but at the moment the environment is skewed to help the perpetrator. Nonetheless, there are those who argue that such NDAs are important. The complete banning of NDAs would result in matters which could otherwise be settled, having to undergo a full hearing before a judge. Employment tribunal systems would be clogged, and businesses and claimants would face great expenses of time and legal fees.
NDAs protect employees and help them move on, especially where the facts are uncertain or positions entrenched. Most employees also want to know what will be said when a reference is sought. Settlement agreements can offer a clean break, fresh start and financial support. Following the abolition of employment tribunal issue fees, there is a greater risk of disgruntled former employees bringing spurious claims. This is where NDAs come in. Faced with these challenges, businesses will often try to see if a claim can be settled for a modest amount.
Clearly there are arguments for & against the use of NDAs in the work place. However, a tricky subject that is currently heating up in the media.
As always, we will let you decide…