NDAs in the news

The injunction itself was of little use to Sir Phillip once he had been named publicly (under Parliamentary privilege) last October but although these legal proceedings have been resolved, the controversy about the use of NDAs lingers on.

Although the standard practice of including confidentiality terms in settlement agreements is unlikely to change any time soon, there is an ongoing House of Commons investigation into their use, which has focused particularly on serial perpetrators of bullying and harassment. The Women and Equalities Committee has expressed concerns that the use of confidentiality terms may prevent such repeat offenders from facing justice and may propose tighter regulation. Even from a purely pragmatic perspective, repeatedly paying off complainants is an increasingly unattractive strategy in the age of social media: such allegations seem to be destined to come to light and the attempted cover-up can cause as much reputational damage as the allegations themselves.

However, employers should not assume that legitimate efforts to protect confidential details of workplace disputes are futile. A recent case involving the Magic Circle law firm Linklaters illustrates how employers can protect their reputation. Linklaters' former director of business development had threatened, after his employment was terminated, to give a series of interviews to the media discussing what he described as ’the ongoing struggle Linklaters has with women in the workplace’. Relying on a confidentiality clause in his employment contract, Linklaters successfully obtained an injunction preventing him from disclosing any details of disputes with former staff and the case was resolved swiftly.

This remains a controversial and developing area of the law, where specialist advice, careful drafting and a nuanced, strategic approach are essential.