'Some employers, probably bigger, more sophisticated employers, have taken all of this seriously' says legal expert discussing bans on sexual harassment NDAs in Canada
The UK has moved to ban non-disclosure agreements (NDAs) in cases involving workplace sexual misconduct and discrimination — another win for those who want to end a practice that often silences victims.
The new legislation, an amendment to the Employment Rights Bill, is expected to come into force later this year. It will void any NDAs designed to silence workers who make allegations of harassment or discrimination.
Deputy Prime Minister Angela Rayner said it was “time we stamped this practice out,” BBC reported. If passed, the legislation will bring the UK in line with Ireland, the U.S. and two provinces in Canada.
Workplace harassment NDAs still legal in Canada
The change is a response to years of high-profile misuse of NDAs, including the case of Zelda Perkins, former assistant to Harvey Weinstein, who broke her NDA to expose sexual abuse and sparked the #MeToo movement. Perkins, now a campaigner, called the amendment a “huge milestone” and credited those who “risked everything to speak the truth when they were told they couldn’t.”
The UK government’s action is intended to ensure “the regulations are watertight and no one can be forced into silence again,” Perkins added.
As Michael Lynk, associate professor of law at Western University, explains, NDAs are still legal in Canada, except for P.E.I. and Manitoba, the only two provinces that have passed laws similar to the UK’s proposed one.
“There are common law rules which may restrict what can be in an employer-employee agreement, if it's unfair or the result of unequal bargaining,” he says.
“But, generally, unless a rule like that is proven, non-disclosure agreements, even with respect to settling a sexual harassment claim, are generally legal.”
Impact of workplace NDA restrictions in Canada
The UK’s new proposed law, along with P.E.I. and Manitoba’s, both enacted in 2022, should serve as a signal to employers to begin changing their approaches to harassment in the workplace, says Lynk.
Employers may still choose to settle the claim, he explains, but they will be unable to include silence about the allegation as a condition of payment. It will also create benchmarks, as settlement payout amounts become public information.
“The employer may not like it, but it gives an incentive to the employer to clean up their act,” says Lynk.
“They now realize that they have damaged their corporate reputation, they've had to pay a fair amount of money which is now publicly known, they may have trouble now attracting good talent to come and work for them, men or women who know this.”
Workplace sexual harassment training: employer’s responsibility
P.E.I. and Manitoba are the only two provinces that have passed laws prohibiting workplace NDAs in cases of misconduct, discrimination or harassment. Nova Scotia tabled its Bill 144 in 2022, which has seen controversial debate and is stalled at the second reading.
According to Lynk, while lawmakers may be sluggish to enact legislative change, organizations are faster to move.
“Some employers, probably bigger, more sophisticated employers, have taken all of this seriously,” he says.
“They recognize that having a reputation, with respect to sexual harassment, does mean that talented people are not going to apply … particularly women, but also men as well, that it winds up adversely affecting productivity and morale in the workplace. If people leave, it's expensive to have to bring in new people and train them again.”
This means proactive, up-to-date training, he adds: “They ensure that that training is done regularly for new employees. Often, it's either a big employer that hasn't taken this issue seriously, or it's a lot of smaller, more unsophisticated employers ... who've never really paid attention to modern human resources practices and probably don't know anything about the Human Rights Code with regards to this.”
NDAs in Canada: more transparency, more reporting
The UK’s ban is expected to encourage more victims to come forward; Lynk predicts a similar effect in Canada as regulations tighten.
“I suspect we're going to see a continued volume of sexual harassment claims,” he says.
“But one other advantage of regulating or prohibiting NDAs on sexual harassment is that women will feel much more encouraged to speak up.”
He warns, however, that high-profile acquittals can have a chilling effect, pointing to the decision on the Hockey Canada sexual assault trial expected this week as an example of cases that can potentially set back workplace practice in Canada.
“If young women ... see in this high-profile case, even though it's at a criminal-level responsibility beyond a reasonable doubt, that some or all of these players were acquitted because the judge thought there may have been too many inconsistencies in the complainant’s allegations, I can only imagine that sets back the issue of trying to rid ourselves of sexual harassment in the workplace,” Lynk says.
“It's not going to do anything to dampen the levels of sexual harassment in the workplace, and it's going to make it harder for some women to say, ‘I should speak up and do something about this.’ So, all the more reason why bringing in prohibitions or tight regulations for NDAs on sexual harassment is so important.”
Recommendations for Canadian HR professionals
Lynk’s advice for HR professionals is clear: rather than “buying silence” to attempt to save corporate reputations, he urges organizations to focus on prevention and culture change.
“Their only way to salvation is to actually take the workplace culture problem seriously and work to clean it up,” he says.
“Make sure that sexual harassment, it's known that it's not tolerated in any degree in the workplace, that you will bring in penalties for this, that you're actually going to be doing assertive training for all employees, to know what is expected of them and where the red lines are. In other words, I think prohibiting or regulating NDAs on sexual harassment in the long run is a good thing.”
