(Bloomberg) -- The U.K. agency responsible for oversight of the country’s #MeToo claims warned employers not to rely on nondisclosure agreements to stop whistle-blowers or other workers from reporting discrimination or sexual harassment.
Gagging orders “should not be used to hide a problem or brush it under the carpet,” the government’s mediation service, known as ACAS, said Monday in a statement. Previous warnings said settlements shouldn’t block people from talking to police, and the new non-binding advice goes beyond that to include companies’ attempts to keep incidents out of the media and civil courts.
The warning puts the onus on employers and follows a renewed focus on the misuse of gagging orders in the wake of the #MeToo movement, with U.K. regulators stepping up efforts to hold financial firms and managers accountable. A Bloomberg News analysis of a little-known public database last year revealed that sex discrimination suits were dropped more than 60% of the time before allegations were made public by British courts and judges could issue a ruling.
Notifying the Advisory, Conciliation and Arbitration Service is a critical first step for employment tribunal claimants in the U.K., making it more likely that a company will abide by the guidance, according to Suzanne McKie, a London employment lawyer.
“I also believe that reporting matters to a regulator should be excluded” from NDAs as well, said McKie, of Farore Law, which specializes in harassment and discrimination claims.
The ACAS advice came after Zelda Perkins, a former assistant in the London office of Harvey Weinstein, broke her NDA more than two years ago to speak out about alleged sexual harassment by the Hollywood producer. Her settlement agreement meant she couldn’t “speak to my family, my friends, a doctor, a therapist,” or even talk to attorneys outside the case about whether the deal was legal and could be enforced, she said.
The advice will extend beyond #MeToo to cover all kinds of whistle-blowing as well.
Confidentiality agreements can be put in place minutes before an employment fight is due to start. HSBC Holdings Plc last month reached a settlement with its former global head of currencies and commodities over his whistle-blowing claims just before the judge arrived in court.
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