Australian researchers say non-disclosure agreements (NDAs) are being used too frequently and inappropriately in sexual harassment cases at work.
Also known as confidentiality agreements, NDAs are legal documents that prevent those who sign them from sharing sensitive information.
In 2022 the Australian Human Rights Council (AHRC) said NDAs should be used on a limited “case-by-case” basis to resolve workplace harassment incidents.
However, a new report has found employers still use NDAs as a default response to sexual harassment cases.
Report
Researchers from the Human Rights Law Centre and the Redfern Legal Centre contributed to the report, published with USyd. It cited a 2022 study which found one in three Australians have been sexually harassed at work over the past five years.
The report said NDAs are frequently used to respond to harassment claims.
As part of reaching an agreement, the parties involved in an NDA may negotiate a financial settlement.
NDAs don’t need to be registered with any formal body.
NDA example
An employee complains to their boss that they were sexually harassed by a colleague.
After a process of mediation, their employer asks them to sign a confidentiality agreement.
The terms of the agreement say the victim-survivor won’t go public with the incident in exchange for financial compensation and an apology.
NDAs can last indefinitely.
Findings
The secretive nature of NDAs means there is little public knowledge about how employers deal with cases of sexual harassment.
Researchers surveyed 145 legal practitioners representing victim-survivors and alleged perpetrators in sexual harassment claims.
The report found 75% of lawyers always used strict NDAs to resolve harassment cases, and considered this “standard practice”.
How are NDAs used?
The report acknowledged “NDAs can be a useful tool” in some instances. For example, a victim-survivor might agree to one instead of pursuing a financially and emotionally taxing legal case.
However, it said a business may use NDAs to protect its reputation.
These NDAs also mean perpetrators can avoid police action and a potential court case.
Agreements are not a legal indication of whether or not an alleged perpetrator is guilty.
Moreover, the report found many victim survivors don’t realise signing an NDA is not a mandatory part of a sexual harassment settlement.
It attributed this to a lack of legal advice and support for victim-surviors.
It also noted there is “little current guidance” for lawyers when it comes to negotiating and settling sexual harassment claims.
AHRC report
The AHRC’s 2020 report on harassment in the workplace, Respect@Work, called the use of NDAs a “challenging issue”.
It also warned NDAs could “contribute to a culture of silence”.
In response, the AHRC and the Federal Government issued new guidelines for employers in 2022, encouraging them to stop using confidentiality as the “starting point” and move towards “a more individualised approach” in sexual harassment claims.
Overseas
A UK study found 95% of people who signed NDAs had negative mental health impacts as a result of staying silent about their experiences.
Ireland and Canada have also proposed national laws in recent years restricting the use of NDAs in settling sexual harassment at work. The U.S. passed a law limiting the use of NDAs in 2022.
