by Kimberley Wallace, Senior HR Consultant
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A Non-Disclosure Agreement (NDA) is a legal contract between two parties which sets out how you share business information or ideas in confidence. Its purpose is to protect how the two parties share information with one another and restricts access to this information by third parties. It is sometimes referred to as a confidentiality agreement.
What is the point of them?
NDA’s facilitate a confidential relationship where both parties agree not to disclose the information covered by the agreement. Typically, NDAs are supposed to be used to protect the business information that may share in meetings and presentations.
Employees can also be asked to sign an NDA to protect a company’s trade secrets. However, the use of NDA’s to prevent employees sharing certain information about a company has proved controversial due to a number of more recent high profile cases.
Why are NDA’s in the press so much?
More recently, the press has highlighted situations where companies have made employees sign these types of agreement as part of a legal dispute. In some cases employees who have been dismissed for whistleblowing or raising concerns about discrimination have been offered compensation in exchange for signing NDAs. This is to prevent adverse publicity and reputational damage to the company.
What’s the issue?
Thanks to the #MeToo movement, NDAs are being associated with the covering up of discrimination, sexual harassment, bullying and other wrong-doings. This more recently and notably started with Harvey Weinstein’s former assistant breaking an NDA to report Weinstein’s extensive sexual harassment and assaults.
In the UK, the press reported that Sir Philip Green (of fashion empire Arcardia) had offered a number of staff substantial compensation in return for signing NDAs, preventing them from discussing their sexual harassment and racial abuse experiences.
The Huffington Post wrote that NDAs offer a free pass to those who engage in sexual harassment in the workplace. With many others viewing that gagging staff is ‘completely unethical’ and illustrates power abuse. The Women and Equalities Select Committee called for changes to the law, and the government has recently announced plans for new legislation to address the misuse of NDAs in the workplace.