What are non-disclosure agreements and why are they controversial?

What are non-disclosure agreements and why are they controversial?

Non-disclosure agreements (NDAs) came under scrutiny as allegations of sexual assault and misconduct emerged with the Me Too movement.

Their usage to prevent accusers discussing allegations is again in the spotlight after appeal court judges granted an interim injunction stopping the Daily Telegraph reporting claims against a “leading businessman”.

A full trial is scheduled to rule whether the newspaper can air what it said are allegations of sexual harassment and racial abuse against the senior executive who used NDAs to keep the complaints “confidential”.

With their secretive nature back in the public eye, here is what you need to know about the agreements:

– What is an NDA?

Sometimes referred to as “gagging clauses”, they are legal contracts used to prevent people from discussing confidential information and keep trade secrets private.

But it is clear they can be used to keep allegations of wrongdoing out of the press.

Harvey Weinstein used NDAs to keep alleged victims quiet (David Mirzoeff/PA)
Harvey Weinstein used NDAs to keep alleged victims quiet (David Mirzoeff/PA)

– When have they been used?

Disgraced film mogul Harvey Weinstein deployed them to keep alleged victims quiet, it emerged, as dozens of women accused him of sexual harassment and assault. He denies all the allegations.

Among those to sign a confidential agreement was Zelda Perkins, a Briton who was an assistant to Weinstein in London.

She risked being sued by breaking the NDA to tell journalists that Weinstein harassed her and sexually assaulted another woman.

They have also been used in politics, with figures revealing that the House of Commons spent more than £2.4m through NDAs over the last five years.

– Free speech is crucial, so why do these exist?

Rather than silence claims of bullying, harassment or worse, they can be used to prevent trade secrets from being made public.

They are widely used in the business sphere and Government guidance says they could be used when sharing ideas with potential investors or financial advisers.

– Is the UK Government acting?

In the wake of the Weinstein scandal, British Theresa May said in December that she will “look at” the use of NDAs.

The Prime Minister added that settlement agreements when someone leaves a company should not go further than protecting client confidentiality and commercial interest.

But she is under renewed pressure to act.

Prime Minister Theresa May is under pressure to act over NDAs (Stefan Rousseau/PA)
Prime Minister Theresa May is under pressure to act over NDAs (Stefan Rousseau/PA)

– What’s the reaction to the latest case?

Ms Perkins said the agreements have become “weaponised”, telling the Telegraph they can be legitimately used to protect commercial property, but there must be legislation to prevent egregious usage.

Maria Miller, chairwoman of the Women and Equality Committee, said such use was “shocking” and NDAs should not be utilised when “there are accusations of sexual misconduct and wider bullying”.

Labour MP Jess Phillips said the latest example shows the businessman can spend a fortune on “fancy” lawyers, while “the wronged party sits while the furore goes on, scared of being sued, able to tell no-one”.

- Press Association

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