Non-Disclosure Agreements: Ethics And Enforceability

Recent media and parliamentary scrutiny has brought the utility and enforceability of Non-Disclosure Agreements (NDAs) into sharp focus. Recently, a parliamentary inquiry prompted by the Harvey Weinsten scandal and the #MeToo global movement found that UK employers were using NDAs, or confidentiality clauses in settlement agreements, to silence victims of sexual harassment. The report, published by the Parliamentary Women and Equalities Committee's (WEC), criticised businesses, the government and regulators for failing adequately to tackle sexual harassment in the workplace.

The findings are a timely spur to the government, employers and lawyers to make sure that NDAs are used for their proper purpose, namely the protection of private information, and not abused to silence victims and cover up misconduct.

NDAs/Enforceability

NDAs are an important legal tool used by businesses and individuals to prevent the disclosure of private and/or confidential information. They are contractual agreements to share confidential information, and to keep that information confidential for a specified time.

NDAs are of particular importance in the context of employment relationships between high-profile individuals and their staff - such as nannies and personal assistants - who, in the course of their employment, routinely learn sensitive information about their employer's private and family life. Whilst private information is generally protected under European and UK human rights law, NDAs play a key role in formalising the scope of the relationship and the use of information obtained in relation to it, as well as creating a mutual bond of trust.

As with any contractual agreement, NDAs are legally enforceable, and a party can claim damages in the event of a breach. It is also possible to obtain injunctive relief to prevent an anticipated or threatened breach, although this is more difficult where some or all of the information is already in the public domain, or where there is a legitimate public interest in its disclosure. Attempts to enforce an NDA can also be defeated by demonstrating that the disclosing party had knowledge of the private information prior to signing the NDA, or that the information was obtained outside of its scope.

Recent Examples

The Harvey Weinstein scandal and #MeToo movement put NDAs firmly in the spotlight. In many cases, it was alleged that NDAs had been used to prevent victims from raising legitimate complaints of serious sexual...