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Calls for a ‘radical overhaul’ of NDAs as #MeToo saga prompts UK gagging order law reform

The government has proposed new legislation that would make it illegal for employers to use gagging orders to prevent the reporting of sexual misconduct in the workplace to police.

The move, announced by business minister Kelly Tolhurst today (4 March), comes as #MeToo continues to rage in the legal profession and beyond after the use of non-disclosure agreements (NDAs) to hide sexual offences came to light in several high-profile cases.

The proposals would enshrine in law that signatories of NDAs cannot be prevented from reporting crimes, harassment or discrimination to the police. They also include measures to ensure that employees signing confidentiality agreements receive independent legal advice on the limitations of these documents.

The NDA saga, which triggered reverberations concerning abusive behaviour in many industries – and lawyers’ role in drafting gagging orders – began in October 2017, with disclosures by British producer Zelda Perkins (pictured).

In written evidence to MPs, Perkins called the gagging order she signed nearly 20 years ago with her former boss, Harvey Weinstein, amid sexual harassment allegations ‘stringent and thoroughly egregious’.

Perkins’ revelations also became the subject of both a parliamentary inquiry and probes by the Solicitors Regulation Authority (SRA), turning an uncomfortable focus on the legal profession.

The same parliamentary hearings made Mark Mansell, the veteran Allen & Overy partner who drafted the settlement for Weinstein and his company Miramax, an unwilling poster boy for the profession’s role in NDAs

MPs last March accused Mansell of crafting an agreement that not only potentially pushed the ethical envelope but could be read as perverting the course of justice.

Throughout 2018 a string of disclosures regarding complaints of harassment or unacceptable behaviour at Baker McKenzie, Dentons, Latham & Watkins, Quinn Emanuel Urquhart & Sullivan and Reed Smith highlighted the legal industry’s record in enabling abusive behaviour.

More recently a would-be whistle-blower, former Linklaters executive committee member Frank Mellish, was last month halted after the firm took out an injunction. Mellish had planned to share information highlighting what he described as ‘the ongoing struggle Linklaters has with women in the workplace’.

Speaking to Legal Business, Professor Richard Moorhead, chair of law and professional ethics at University College London and a specialist adviser to the newly launched non-disclosure agreement select committee, said: ‘While the proposed legislation is symbolic and a bit of progress, the scope looks quite narrow. On first reading, there is nothing very earth-shattering in that the legislation would outlaw something that is already illegal in my view.’

He added: ‘I have seen cases where penalty clauses and warranties have been used in place of gagging orders and I can see lawyers trying to work around this. The devil will be in the detail of how the legislation is worded.’

Perkins told Legal Business that, although this is a step in the right direction, the government could have gone further.

‘While I’m pleased that this is happening, any normal person on the street would have presumed this legislation would already be in place. That it isn’t shows how bad the issue is.’

She added: ‘There needs to be a radical overhaul of NDAs – the environment is absolutely right. There is, of course, a role for confidentiality agreements when it comes to issues such as intellectual property, but they should never protect organisations and individuals from allegations of sexual misconduct.’

Suzanne McKie QC, a sex discrimination and harassment specialist and the founder of Farore Law, told Legal Business that there should be a clear written description of rights before the NDA is signed.

‘If this is to be implemented, employers will need to provide employees more than the usual £500 to obtain independent legal advice. I would like to see an extra protection –that only lawyers with employment law expertise and who are more than three years qualified should be allowed to sign these NDAs on behalf of claimants.’

For more on the murky world of NDAs, read Legal Business’ analysis, Draining the Swamp.