#Metoo, But Keep it Secret

Author:
Aneil Balgobin
Partner, Head of Employment Law
Date:
07/01/2019

Almost every employment Settlement Agreement or ACAS Agreement will include a clause involving both parties agreeing to keep the terms confidential.

Many of my clients are content for both parties to keep the terms secret, as they don’t want current or former work colleagues to know about money being received by way of compensation, together with other possible clauses.

A confidentiality agreement is known in the media as a “gagging clause”, and in the Sunday press, we were told that the government is planning action on gagging clauses “within weeks”, reflecting the Philip Green injunction case and the disclosure of identity in breach of the injunction by Peter Hain.

We don’t yet know all of the facts, but my assumption is that employees have received payments in “settlement” of allegations against Mr Green, and part of the agreement will be a confidentiality clause.

When is an Employment Settlement Agreement Completed?

Any employment Settlement Agreement is only completed when the employee receives independent legal advice about the agreed terms, and they should only sign the agreement with knowledge of all aspects of the deal.

Many Settlement Agreements are concluded without any hearing having taken place to prove allegations, and on both sides, there is often benefit in drawing a line under an issue without the challenge and conflict arising from a disputed legal case, including the payment of often substantial legal costs.

There is something appealing in legal terms about parties to an agreement being required to adhere to what they have agreed to and signed and no doubt the unanimous decision of the Court of Appeal on the injunction reflected this view.

The problem with this basic analysis is that it can be a mechanism for a repeat offender to keep their behaviour secret and to avoid the consequences of negative findings from an Employment Tribunal and publicity, for example on allegations of discrimination.

The Philip Green case brings to the fore the inherent conflict between this concern and the need for certainty in contractual agreements.

Discrimination at Work

There are important social policy considerations when dealing with allegations of Discrimination at Work, bearing in mind the #Metoo campaign and the legacy of many types of historic discrimination in workplaces being kept secret.

Some months ago, I read about proposals to address sexual harassment allegations in the workplace, including the need for a legal obligation upon employers to investigate all allegations of sexual harassment, and potentially a reporting requirement.

It is in my view unlikely that the government would legislate to prohibit all forms of confidentiality clauses in employment-related agreements.

It would run contrary to the principle associated with the freedom of the parties to contract on particular terms.

Instead, I expect that there may be a restriction on what type of contract clause may be agreed, and more importantly enforced by a Court.

I’m familiar with the historic concept of Parliamentary privilege and why it’s a matter of public interest for our representatives who retain freedom to raise issues of public concern.

There’s no doubt that Mr Hain has started a public debate, but I share the concerns of many Lawyers when the privilege has been exercised contrary to a unanimous decision of the Court of Appeal, when there’s no dispute about the fact of agreement being reached with independent legal advice, and prior to a final hearing between the parties.

No doubt this area will continue to be a matter of great public interest, and a review of the government proposals will follow in due course.

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