Legal Services Board shines a light on misuse of NDAs in new report

The Legal Service Board (LSB) has published a summary of evidence report which shines a light on misuses of non-disclosure agreements (NDAs).

Almost all individuals who wrote to the LSB about their experiences reported “suffering devastating impacts” from signing an NDA. Their examples included the fear of retribution or potentially breaching the terms of their NDAs had caused mental health issues.

The purpose of the report was for the LSB to reflect the many and varied points made after its call for evidence. The legal services market regulator said it received over 100 formal responses to its call.

Respondents to the report was largely focused on the potential misuse of NDAs by employers following experiences of workplace misconduct.

The LSB were informed of people being asked to sign an NDA following bullying, harassment and discrimination and other employment issues.

The report quoted a response which stated “I didn’t have another job to go to immediately… I had no
choice but to sign the NDA.”

The report outlined that an individual reported that they had opted to sign an NDA as there was a two-year wait for them to have a hearing at an Employment Tribunal and they felt they could not wait that long due to the stress of the situation.

The LSB received over 30 reports of experience of workplace maternity discrimination involving a NDA. The report quoted a person who said: “I was having complications with my pregnancy and I thought the stress of fighting my employers might affect my baby, so I agreed to sign.” During these maternity disputes, the report outlined that many respondents said they were vulnerable due to the “power imbalances”.

Some disclosed accounts of sexual assault or harassment, other’s reported feeling forced to sign an NDA due to power imbalances associated with wealth and industry connections.

Commenting on the report, Law Society of England and Wales president Nick Emmerson said: “The Legal Services Board’s (LSB) summary of evidence highlights some of the issues that can arise with the use of NDAs”.

“While it is not possible to know how many illegal or unethical NDAs have been used the LSB have evidenced that there have been instances of such agreements. We look forward to seeing their analysis of existing regulatory and legislative framework and considering any proposals the LSB has to help improve it.

“We recommend that all solicitors who advise on NDAs in employment situations read both the Solicitors Regulation Authority’s Warning Notice and our practice note on the subject. These clearly set-out a solicitor’s legal, regulatory and ethical responsibilities when advising on the use of NDAs,” he added.