#MeToo has set a clock running on employment law

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By Daniel Russell

It has taken precisely a year and an open threat to subvert a Court of Appeal ruling, but last week the #MeToo movement put every employer in the country on notice that they would no longer be able to rely on non-disclosure agreements to protect them from their own wrongdoing.

Earlier in the week, the Court granted an injunction to stop a national newspaper identifying a prominent business executive accused of sexual harassment and racial abuse of his staff.

In doing so, the Court not only upheld the terms of an NDA signed by five former employees on severance from their jobs, but also overturned a previous High Court ruling that said naming the man was in the public interest.

The NDA protected the man’s identity but, crucially in the Court of Appeal’s view, did not prevent the alleged victims from reporting a crime or pursuing a private prosecution - the clear inference being that in the absence of a known claim against the individual, and without any evidence the NDAs had been procured unfairly, there was no public interest case to answer.

Strike one for the sanctity, however questionable in this case, of an NDA. At least, you’d be forgiven for having thought so.

But Jess Phillips, MP for Birmingham Yardley had other ideas. In the Commons last Tuesday, she threatened to use the absolute privilege afforded to Parliament to identify the man in question, saying: “Riches cannot mean impunity”.

Absolute privilege, which applies to both Houses of Parliament and to all UK courts of law apart from coroners’ courts (inquests), is a complete defence to any consequent legal action. In short, Mrs Phillips could, if she chose, use Parliamentary privilege to ride a coach and four through the Court of Appeal ruling without fear of any legal reprisal.

And so it came to pass that the Prime Minister found herself batting on a very sticky wicket during Prime Minister’s Questions when, standing in the shadow of the Labour MP’s Damaclesian sword, Mrs Phillips asked her if she supported the Court of Appeal decision.

Mrs May, in an unsurprising attempt at political diplomacy, agreed that while she couldn’t comment on the case in question, the whole affair sent an unfortunate and unwanted message about the role and value of women in the workplace and pledged to increase scrutiny over the use of NDAs in employment settlements in the future.

Considering all that has happened, it seems something of an understatement to say the impact of the #MeToo movement on the employment sector can’t be underestimated. Quite what changes it will wring have yet to be seen, but the fact changes will be wrought now seems beyond question.

What last week’s events demonstrated with vivid clarity – and what the PM confirmed in announcing greater scrutiny – is that the use of NDAs, particularly in an employment context, can be unethical and is often abused.

The civil service has itself come under fire for its prolific and unchecked use of NDAs in severance agreements with former government staff, so the irony of Whitehall facing the prospect of having to prioritise the cleaning of its own house has hardly gone unnoticed in some quarters.

Certainly, there is now a question over whether NDAs have any place at all on the employment landscape. How specific industries choose – or may be forced in the future – to adapt in the aftershock of this week will be interesting to watch, but it would be hard to bet against the implementation of new measures to extend the protection of whistle-blowers and safeguard human and equality rights of departing colleagues.

And what of a move to outlaw the use of NDAs in severance agreements, something that would be welcomed by many leading figures, including Maria Miller, the chair of the Parliamentary Women and Equality Committee who yesterday said that was the route she personally favoured?

It’s easy, in the wash of the media’s spotlight, to immediately see non-disclosure agreements as fundamentally flawed, but that’s not to say there isn’t an appropriate place for them.

It’s not hard, for example, to imagine sectors which are heavily reliant on R&D – pharma, tech and automotive, say – arguing hard for NDAs to have a role in protecting financial interest and competitive advantage when colleagues in commercially-sensitive roles choose or are forced to leave for pastures new.

As with all things, the formal and long-term response to the #MeToo effect on UK employment law will need to be considered and measured and not simply a knee-jerk, one-size-fits-all approach agreed in haste simply to appease popular demand.

But neither can the Government be seen to drag its feet. The PM has promised closer scrutiny and closer scrutiny she must now deliver.

One year on from its viral beginnings, the #MeToo movement, aided by a backbench MP with the bit between her teeth, has set a clock running. All the signs suggest the Government would do well to make sure it is not allowed to count down too far.