Non-disclosure agreements (“NDA”) have been heavily scrutinised in recent years, particularly since the #MeToo movement, and since stories have emerged of victims of workplace harassment and discrimination being prevented from speaking publicly. In response to this, the Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021 (the “Bill”) was recently launched which seeks to restrict the use of NDAs in such cases.
What is an NDA?
An NDA is a mechanism, either as a standalone agreement or contained in a clause within a contract, which is frequently used to prevent confidential information from being disclosed by individuals/companies – whereby each party agrees not to disclose certain information. These frequently arise in commercial agreements such as supply agreements and mergers & acquisitions. Most importantly however in the context of this Bill – NDAs can also take the form of settlement agreements regarding workplace disputes and can effectively be used to silence employees. It is important to note the NDAs will most likely subsist indefinitely, even after a commercial relationship has ended.
Why is the Bill being introduced?
Given the risk of the “gagging effect” of NDAs, at the recent launch of the Bill, it was stated that the Bill seeks to give control back to victims as it purports to curtail the use of NDAs in cases where discrimination or sexual harassment are alleged. The Bill also seeks to ensure that NDAs are not used prematurely – i.e. so that allegations are properly investigated and evidence collected regarding such allegations in the workplace.
The Bill would be a significant development in the law of equality in Ireland, along with being a watershed moment in the #MeToo movement, as this Bill would be the first of its kind worldwide (unless similar draft legislation before the Californian and UK legislatures pass first).
What would the Bill change?
The Bill is brief but would be impactful should it pass and become law. It seeks to outlaw the use of NDAs in cases where they have been used to prevent the disclosure of allegations being made regarding:
- Discrimination - based on the nine grounds contained in the Employment Equality Acts (i.e. gender, marital status, family status, sexual orientation, religion, age, disability, race and membership of the Traveller community1); and
- Sexual harassment.
Not only would such NDAs be unlawful going forward, but the Bill would also apply to agreements signed in the past – making the Bill retrospective in nature. This means that any NDA, or NDA clause within any settlement agreement agreed to in the past, may become null and void and the contents of the agreement and allegations would be made public. However, NDAs would still be valid/possible in instances where such allegations have been made, once strict criteria are met.
Criteria for lawful NDAs under the Bill
The Bill recognises that it cannot prevent employees from entering into a NDA if it is “the expressed wish and preference” of the employee to do so. However, specific criteria would need to be met to ensure consent has been freely given. At the Bill’s launch, it was stated that these criteria should be in place as safeguards for victims of harassment/discrimination negotiating agreements while at their lowest point emotionally. The criteria are:
- The employee has been offered independent legal advice.
- There have been no undue attempts to influence the employee in respect of the decision to include a confidentiality clause.
- The agreement does not adversely affect:
- The future health/safety of a third party
- The public interest
- The agreement includes any provision which allows an employee to decide to waive their own confidentiality in the future.
- The NDA is of a set and limited duration.
- No separate NDA has been entered into concealing the details of the complaint of discrimination / harassment itself (as opposed to the settlement of the matter).
If an NDA entered into by a victim of harassment / discrimination does not meet these criteria, it will be null and void and the employer could be found guilty of an offence.
When can changes be expected?
The Bill won unanimous support in the Seanad on June 14th although it is yet to go before Dáil Éireann. The Equality Minister, Roderic O’Gorman, stated he welcomes Sen. Ruane’s proposals and that:
“No one should ever be put under pressure to conceal harassment or discrimination to protect an individual, or an institution or a company reputation. The Government has agreed to conduct more detailed research on the extent of the practice in Ireland and will work with Senator Ruane to advance these proposals further.”
We await a date for the outcome of this research. However, due to the possible retrospective effect of the Bill, employers should pay close attention to confidentiality and NDA clauses in these contexts to ensure they are not overly burdensome on employees who are in a potentially very vulnerable state. The above criteria can be considered to ensure that agreements pass the test of time. The progress of the Bill can be tracked here.
1 It is also currently being considered in Ireland as to whether socio-economic status shall become one of the grounds under equality legislation.Back to Full News
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About the Authors
Catherine Jane O'Rourke
Catherine advises both employers and employees, in relation to contentious and non-contentious employment matters, including contracts of employment, workplace policies, workplace investigations, statutory compliance, redundancies and dismissals.
Catherine also has a background in transactional banking, including acquisition finance, property investment finance and development/construction finance. She has significant experience in both domestic and cross-border SME secured lending with a particular focus on multi-jurisdictional transactions.
Breda practises in both Employment and Commercial Law and is Partner and Head of the Employment Law team at Hayes solicitors. Breda has trained and qualified as a mediator with the UK based, internationally renowned Centre for Effective Dispute Resolution (CEDR). Breda practices as a mediator of commercial, employment, boardroom, charity trustee and shareholder disputes.