In October 2017, a worldwide #Metoo movement was triggered by allegations of sexual harassment against media mogul, Harvey Weinstein. It brought to light numerous stories of years of sexual harassment, abuse, and assault faced by women at the hands of “men in power”. These men often held positions of influence and power, which they abused not only to torment and exploit women but also to silence them by crushing them under legal contracts called non-disclosure agreements (“NDAs”).
NDA, also known as confidentiality agreement or hush agreement, refer to a legally binding contract that requires one party [or the parties] to not disclose information deemed sensitive. They can be included in all kind of contracts, including employment contracts, and are crucially used in settlement agreements in various industries. They are usually accompanied by significant financial settlements as well as penalties for breaching the agreement. In the last thirty years at least, NDAs have been increasingly used against victims/ survivors of abuse in many instances, both in the private sector and the non-profit sector, including the UN.
NDAs are problematic for workplace misconduct
While there are some legitimate and valid bases for the use of NDAs, such as protecting intellectual property or confidentiality necessary to facilitate open discussions or even to protect the identities of whistleblowers or other vulnerable persons, their use in cases of harassment, abuse and discrimination has been roundly denounced even by ardent supporters of the NDA. It is, however, argued that barring NDAs entirely may prevent a victim from seeking the only possible and accessible form of redress, i.e., financial, when the alternatives are too expensive or too risky for an individual to pursue. This is particularly the case in the present legal scenario, almost globally, where litigation on allegations of workplace misconduct can be lengthy and costly, both personally and financially.
NDAs in harassment cases are problematic for several reasons. For one, they reflect the power imbalance between a company or an influential figure on the one hand and an employee or a far less powerful individual on the other. Refusal to sign such agreements frequently results in reprisal and termination of employment. Individuals often find themselves in vulnerable positions and agree to substantial financial consequences in case of a breach of an NDA. Further, NDAs are typically not limited in time and deprive individuals of the right over their own stories and experiences in perpetuity. They prevent the public airing of actions and conduct that may be corrupt, abusive, and even criminal. Rarely do these agreements envisage its revocation or cessation, as such enforcing a collective amnesia on all concerned. Most crucially, NDAs do not entail an acknowledgment of wrongdoing on part of the enforcing party.
NDAs used to enforce collective silence
NDAs in the private sector entail substantial monetary settlements to the victim in order to imbue the agreement with some semblance of fairness. However, they are far from fair sums when considering that the victims may never again work in their field of choice. Not only do NDAs deprive them of any acknowledgement of harm or wrong suffered, they also bar victims from speaking to anyone, including close family, friends or even therapists, about what happened to them. Too often, NDAs have been used to threaten victims against considering a breach as well as to cast doubt on the truth of their experiences. As a result, NDAs also have gross negative impact on the victim’s mental health. You may recall the Roger Ailes/ FOX News NDA with Gretchen Carlson being the reason she could not speak to her own experiences which were nevertheless depicted in the movie “Bombshell”.
In reality, NDAs only work because the alternatives in law and in society are far worse. Complainants who seek justice through the courts know they will suffer far more indignities in their pursuit. The risks of being publicly subjected to aggressive and sexist defence strategies, brutal and swift retaliation, along with trial by media and public opinion, typically push complainants to choose NDAs as the only dignified exit strategy. Were the courts efficient, the law gender-responsive, the litigation culture less sexist, and the outcomes less susceptible to political consideration, NDAs may well fall out of favour.
The MeToo movement saw targeted activism against the use of NDAs for sexual harassment cases. Several American states passed laws restricting the use of NDAs for sexual harassment settlements. In 2017, the European Parliament passed a resolution on combating sexual harassment and abuse in the European Union, in which it encouraged the Member States “to consider modifying the provisions of their law to ensure that employees who are forced to sign non-disclosure agreements as part of a settlement cannot be bound to withhold the reporting of sexual harassment or abuse as part of the agreement”. In the UK, new legislation in 2019 proposed a ban on NDAs that have the effect of silencing victims of workplace harassment, discrimination and abuse and preventing them from disclosing relevant information to the police, doctors or lawyers. The New Zealand Law Society published a report containing new rules for lawyers in relation to reporting and taking action in the context of sexual harassment, bullying, discrimination and other forms of misconduct which recommended the auditing and monitoring of NDAs. Employees at multinational corporations took direct action, such as at Google and Facebook, by walking out of their offices to demand discontinuation of the use of NDAs for sexual harassment claims.
NDAs in non-profit sectors
Within the aid/ development/ humanitarian/ non-profit world, the #Metoo movement occupied its own web space as #AidToo and #UNToo to identify their unique stories. This was followed by some public reporting on the use of NDAs in the sector. Examples include Save The Children, which used confidentiality agreements in addressing sexual harassment allegations, and Amnesty International, which resorted to NDAs in settling a case of staff suicide and another equal pay case. The sustained interest in it saw recent reporting on the issue by Devex which addressed the “grave concerns” over the NDAs in non-profit, not least because of insufficient oversight and regulation of their use.
A major impact of the MeToo movement at the UN was the dramatic increase in number of people speaking up and reporting misconduct. Different UN agencies recorded an increase of 40% to over 200% in the rate of reporting of sexual harassment and serious misconduct. The UN teams on internal investigation and legal aid teams were unprepared, overwhelmed, and understaffed. The Office of Staff Legal Assistance, in its annual report, stated that it settled over 50% of the cases it received. Due to their very nature, there is no publicly available data on the frequency or nature of these agreements but there are reasons to conclude their use in settling matters of prohibited workplace conduct. Unlike the private sector, however, NDAs at the UN do not come with a pot of gold that can set one up for life. UN negotiates settlements on the basis of the salary grade of the victim, in terms of number of months of pay, to a statutory maximum of two years.
These hush agreements have been acknowledged, upheld and even encouraged by UN employment tribunals as a means for alternative dispute resolution. The United Nations Disputes Tribunal (UNDT) has commended parties for successfully pursuing amicable settlement, and noted that “such efforts should be encouraged as the amicable resolution of disputes is an essential component of the new system of internal justice, not only saving valuable sources of the Organization but contributing also to a harmonious working environment and culture.” In the context of an application withdrawn by the Applicant pursuant to the terms and conditions of a confidential agreement, UNDT referred to the doctrine of res judicata, according to which a matter between the same persons, involving the same cause of action, may not be agitated twice. It held that the “unequivocal withdrawal of the merits signifies a final and binding resolution with regard to the rights and liabilities of the parties in all respects in her case, requiring no pronouncement on the merits but concluding the matter in toto.” In another case, the UNDT granted an Applicant’s request for anonymity after having closed the proceedings following the conclusion of a confidential settlement agreement between the parties on the basis that confidentiality of the judicial proceeding is in the interest of the Respondent, too. The UNDT also found that it was competent to review a settlement agreement for the purposes of ordering its enforcement. In the particular case of a staff member claiming that a settlement agreement had been breached by the Organization, UNDT held that where necessary, the review must essentially lift the veil off the entire process of negotiations and include a review of the statements and promises made in the course of mediation or settlement discussions. Thus, it found that by submitting the application, the Applicant had not breached confidentiality. On the negotiation process itself, the UNDT noted that it “cannot be denied that in any employment relationship between a staff member and the Organization, the staff member is the party in a weaker position especially because he/she is not privy to the considerations behind the decisions that affect him/her.” In this particular case, UNDT found that the Applicant was lied to and falsely misled in order to have him sign the Settlement Agreement and concluded that the agreement itself “was tainted by deception and its spirit and intent have been breached in its implementation.”
At the ILO Administrative Tribunal, a complainant challenged the WTO’s decision not to conduct an inquiry into his allegations of harassment following a confidential separation agreement. In relation to clauses that prevented the complainant from filing an internal appeal or escalating to the tribunal, the Tribunal found that the infringement of an official’s right to appeal or file a complaint was not unlawful. Notably, in response to the complainant’s argument that the clauses are unlawful because they are incompatible with the Director-General’s obligation to act on complaints of harassment or abuse of power, the Tribunal held that the exception made to that obligation is effectively a consequence of the complainant’s undertaking and does not amount to a breach of a mandatory requirement.
Call for the discontinuation of NDAs
Ostensibly, the primary rationale for the use of NDAs in the non-profit sector remains their potential for confidentiality and anonymity for the complainant, with the added benefit of reputational damage control for an organisation. But the porous nature of the UN and the wider non-profit sector, where recruitment runs on reputations and recommendations, stories seep through closed doors and travel across continents. The victim/ survivor may well be on an unofficial black-list, with no way of proving that their employer breached confidentiality. This black-list may also extend to social and professional isolation, for fear on part of supporters of being viewed as potential troublemakers.
In the meanwhile, organisations are not obliged to, nor do they, disclose whether any disciplinary proceedings were initiated against the perpetrator. Since NDAs do not stipulate fault, arguably there would be no legal basis to institute disciplinary sanctions against perpetrators. Their names remain untainted and unconnected to the misconduct, protected as they are by their employers’ rush to shield themselves from public scandals. Some, if not many, of these offenders are recidivist sexual predators well-known for their predilections among friends and colleagues.
There is one certain outcome of the use of NDAs in the UN – it entrenches the culture of silence that has protected and propagated the organizational culture of loyalty above all else. The UN and other international organizations are far from placing an embargo on such settlements. Nonethless, thought-leaders in the non-profit sector have started advocating this position. CHS Alliance prepared a guidance note on the appropriate use of NDAs and pointedly advises organisations to “prohibit the use of NDAs to cover up inappropriate behavior and wrongdoing, stop the reporting of discrimination harassment or prevent whistleblowing, with the only exception when employee requests for it”. The Alliance also recommends clear recording and reporting of the use of NDAs, along with information on amounts of settlement.
Experience shows that deep changes never come voluntarily from any employer. Much like in the corporate world, there is need for a ground-swell of demand from employees, whether as victims of misconduct, or staff associations/ unions, donors or independent commentators. The same States that make domestic law prohibiting NDA misuse nationally could lead the charge for a parallel policy internationally.
These demands should, at the very least, include that the UN and IOs:
(i) prohibit the use of NDAs for settling sexual harassment, abuse, discrimination, whistleblowing, and other serious misconduct cases, unless requested by the complainant;
(ii) adopt an explicit policy on the use of NDAs or similar agreements that strictly draw the parameters of their use as well as demarcate their limits; and
(iii) undertake to annually report disaggregated data on the frequency, nature, rationale, and sum of settlement of NDAs per year.