It’s a common scenario in employment law.  An employee makes a complaint of harassment against another member of staff and instead of the matter being investigated and possible disciplinary sanctions applied, the complainant is offered an exit package. In return for a sum of money the employee is required to sign a Settlement Agreement which prevents her from talking about the circumstances surrounding her departure, a so-called non-disclosure agreement (NDA).

The House of Commons Women and Equalities Committee doesn’t like this and points out that discrimination at work is unlawful and employers should not have the option to cover it up through the use of NDAs

That’s a fair point.  If employers routinely pay employees off rather than investigating allegations of discrimination and harassment, the perpetrators will get away with it and the person who raised the complaint will feel they have been forced out. These issues should not be swept under the carpet.

However, looking at it another way, women who raise these complaints rarely want to go to tribunal.  They don’t want the stress of giving evidence about their ordeal and facing their alleged harasser in tribunal. They want to get on with their lives and put these experiences behind them. The best way to do this is to leave with a sum of money that will provide them with a financial cushion while they regain their confidence and look for another job. But most employers are reluctant to pay substantial sums of money without ensuing confidentiality. They may as well contest the allegations in tribunal.

So NDAs can be misused but, before you write them off, bear in mind that they can also be an essential way of avoiding an expensive and stressful tribunal hearing.