NDAs in sexual harassment cases: Are they protecting abusers?

Non-disclosure agreements (NDAs) are often implemented in workplace sexual harassment cases to save face for the company, no doubt. However, this can be a slap in the face to the victims, as many believe the abusers are let off too easily.

There has been some pushback over the use of NDAs in sexual harassment cases over the years. According to Sexual Harassment Australia, the MeToo movement served as a catalyst for scrutiny of these legalities.

Standing ground

One person who publicly stood up against these NDAs is Kate Jenkins, the 2022 sex discrimination commissioner. She commented on the unfair treatment many experience in the workplace, with 40 per cent of women falling victim to harassment and 26 per cent of men.

“It’s happening face to face and online. And most harassment is still perpetuated by men. Less than one in five people who experience sexual harassment report it. Either they thought it wasn’t serious enough, or it was easier to keep quiet,” said Ms Jenkins.

NDAs only make these issues worse, as perpetrators are able to move with immunity: “Confidentiality around [sexual harassment] issues allow people to move from workplace to workplace or even stay in the same workplace and even continue to harass,” Ms Jenkins explained.

“They also silence people who experience harassment and find years later they still can’t talk about something that had happened to them. And they hide information that corporate boards or leaders need so that they may never even know there had been issues.”

Where the law falls behind

Currently, in Australia, there are no laws preventing the use of NDAs in workplace sexual harassment cases.

There have been calls for the introduction of legislation, with Ms Jenkins once again leading the charge: “We want to hear about individual experiences to inform our understanding of the systemic issues.”

“In particular, we want to learn about the operation of NDAs in practice, including general terms and conditions; and whether the use of NDAs in specific cases has been advantageous or otherwise from the perspective of all parties to the agreement. It is important that we hear from both employers and employees about the positives and negatives of this practice,” Ms Jenkins outlined.

Victoria was the first state in Australia to make some progress towards eliminating sexual harassment NDAs. Then minister for workplace safety Ingrid Stitt announced, on 11 July 2022, recommendations to the Ministerial Taskforce on Workplace Sexual Harassment, “highlighting the urgent need to stamp out this pervasive workplace health and safety risk”.

“A workplace that is not free from sexual harassment is not a safe workplace. These reforms will ensure employers understand they have clear occupational health and safety obligations to protect workers from sexual harassment,” said Ms Stitt.

However, since this announcement, the topic has gone quiet, and no evidence of these laws being implemented has been recognised.

Back in 2022, Respect@Work released the Guidelines on the Use of Confidentiality Clauses in the Resolution of Workplace Sexual Harassment Complaints report, which offered recommendations on how to approach sexual harassment NDA laws.

The six recommended approaches were:

1. Consider the need for a confidentiality clause on a case-by-case basis.
2. The scope and duration of the confidentiality clause should be as limited as possible.
3. Confidentiality clauses should not prevent organisations from responding to systemic issues and providing a safer workplace.
4. All clauses in a settlement agreement should be clear, fair, in plain English and, where necessary, translated and/or interpreted.
5. The person who made the allegation should have access to independent support or advice to ensure they fully understand the meaning and impact of the settlement agreement, including any confidentiality clause.
6. Negotiations about the terms of a settlement agreement should ensure, so far as possible, the wellbeing and safety of the person who made the allegation and be trauma-informed, culturally sensitive and intersectional.

Employer opinions and obligations

Disappointingly, Sexual Harassment Australia believes that employers are largely against reforming non-disclosure agreement laws. Employers have a duty of care to protect employees, and some may argue that NDAs contradict that.

“Australian employers, however, have a huge incentive to maintain the current non-disclosure laws. Namely because they allow employers to avoid any reputational damage as a result of sexual harassment taking place under their watch. And because they prevent victims from taking legal actions against them later on,” said Sexual Harassment Australia.

While reform may be on the horizon, it is still yet to be seen. This is why employers must leverage their influence to protect employees.

This means not sweeping issues under the rug, and prioritise integrity over image. Creating a psychologically safe workplace where people can thrive is the responsibility of all employers.