Russell: We have to stop the use of NDAs
The money employers have to pay employees for legal advice on settlement agreements is not enough to deal with the non-disclosure agreements (NDAs) they routinely include, MPs were told yesterday.
Part of the reason NDAs remained prevalent in employment law was put at the door of non-lawyer HR consultants, but solicitors were to blame too.
Labour MP Sarah Russell, a former employment solicitor who acted mainly for employees, was speaking in a parliamentary debate on NDAs
“A lot of businesses have a human resources adviser who is not regulated by the Solicitors Regulation Authority (SRA),” she said. “Many of them are good people who do a good job of providing affordable advice to businesses; I do not want to universally condemn HR consultants.
“The reality is that at some point they will have been given a precedent settlement agreement by a solicitor – we might be talking 20 years ago – and those agreements contain NDAs, so they are still in widespread use.”
She added: “It is all well and good that the [SRA] has said that people should not put forward NDA clauses, but they are still in extremely widespread circulation.”
While an employer pays between £250 and £500 for the employee to take legal advice on a settlement agreement, “the reality of the legal market is that no specialist employment lawyer will explain a potentially 20-page legal document to the person, send them follow-up written advice and renegotiate the terms for £250”, Ms Russell said.
“People on low pay can go to a lawyer who for £250 will perhaps take them through the terms of the agreement and explain what they mean, but then they have run out money, so that is the end of it. The terms are not renegotiated and the person just signs what is put in front of them…
“A solicitor like me working against a solicitor on the other side who has put forward something that does not meet the SRA guidelines will say, ‘We’re not signing that – you know it’s not compliant. You’re in breach of your professional obligations, now get this off the table’. And they do – swiftly.”
At best, Ms Russell said, people who could not afford to pay more for a lawyer “end up with some really shoddy solicitor who is not necessarily a specialist employment lawyer and is prepared to sign off pretty much anything”.
She concluded by describing a “systemic problem that is being used to cover up employment rights abuses across the board”.
She called for standard wording that people could not derogate from, whether lawyers, HR consultants or business owners.
“There are lots of good employers out there. I do not want anyone to think that I think all employers are terrible… but we have to stop the use of NDAs.”
The debate was secured by former Labour cabinet minister Louise Haigh, who has been campaigning to include a ban on the use of NDAs in cases of harassment, discrimination and abuse, unless at the specific request of the victim, in the Employment Rights Bill currently going through Parliament.
She acknowledged the work of the SRA and Legal Services Board on NDAs, and that both the Law Society and Bar Council have called for legislative reform.
Another Labour MP, Dave Robertson, agreed from his experience as a trade union official that it was standard practice to include an NDA in a settlement agreement.
“Settlement agreements are an important piece of our employment law framework, but we must not have this situation where NDAs are attached to them by default, preventing things from being aired.”
Responding for the government, business minister Justin Madders pointed to the SRA’s updated warning notice that NDAs should never be used to try to prevent the lawful disclosure of serious misconduct or potential crime.
He noted too that the regulator has said that evidence of the use of inappropriate clauses in such agreements may lead to disciplinary action.
“Nevertheless, we hear the calls to go further… It is clear that there are still serious concerns about how employers are using NDAs to silence employees.”
He agreed with Ms Russell that non-legally qualified consultants often “simply apply boilerplate clauses to agreements, which has a practical impact on the victim’s ability to explain how their employment ended”.
That, and the inadequate contribution to legal fees, “highlight the inequality of arms in the workplace when disputes arise”, Mr Madders said.
But he said a lot of work needed to be done to make any ban effective. “It is important to ensure that any work we do does not create a new loophole for clever lawyers to exploit, so it should be future-proofed as much as possible.”
He added: “We need an awful lot of discussion to get… access to justice and legal advice that is timely, correct and affordable.
“A cultural shift from employers is also important. Legislation can say what it wants, but unless we get employers to tackle rather than protect the perpetrators of these terrible acts, we will continue to debate these matters.”
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