Thu Dec 2

We can't stop workplace sexual harassment without banning non-disclosure agreements

Written by: Maria O'Sullivan, Associate Professor, Faculty of Law, and Deputy Director, Castan Centre for Human Rights Law, Monash University

One major problem uncovered in “Set the Standard ^[1]”, the landmark report on sexual harassment and bullying in the parliament workplace is that secrecy and silence conceal toxic workplace culture.

The report conducted by Sex Discrimination Commissioner Kate Jenkins shows that serious harms, particularly gender-based harassment and bullying, have been normalised within the our own national parliament - and the victims have been unable to speak out until now.

Central to this practice of concealment is the increased use of non-disclosure agreements, or NDAs, in Australia.

These agreements have become a focus of public debate since the #MeToo movement began in the US. Their harmful effects were demonstrated after it was revealed Harvey Weinstein systematically used NDAs ^[2] to prevent his victims from talking about his conduct.

But the silencing effect of these agreements has not yet received the same attention in Australia.

That has now changed with the release of Jenkins’ Respect@Work Report ^[3] last year and the new Set the Standard report released this week.

Both have recommend changes to the use of NDAs in relation to sexual harassment and bullying cases. The time has come for a serious re-evaluation of these agreements.

What is an NDA?

NDAs are restrictive confidentiality arrangements. They can have a legitimate role in, for instance, protecting company secrets, such as patents or intellectual property. Such agreements are designed to ensure a person or organisation who gets access to sensitive and often valuable information does not disclose it to a third party.

However, these agreements have been exploited and their use extended far beyond their original limited function.

NDAs are now increasingly used against employees who make complaints about discrimination and harassment. Organisations often settle these matters by compensating and then terminating the employment of the person who made the complaint, but on the condition that person signs an NDA forbidding them from disclosing the bullying or harassment.

Indeed, lawyers say ^[5] NDAs have become standard practice for employers dealing with sexual harassment complaints in Australia.

The widespread use of NDAs is also reflected in a statement made by the union representing public sector employees to the Jenkins’ inquiry. It said it is common

[…]once a complaint has begun to be aired for the process to become about getting the worker a payout or moving them on in a way that limits damage to their employer. In some cases, employees will be required to sign nondisclosure agreements on termination of their employment.

The problem with this practice is the offending conduct is never formally “known about” by senior leaders in the organisation – or the public.

Oftentimes, the perpetrator stays at the organisation and is promoted. Or they move on to another organisation where the offending conduct continues. Meanwhile, senior managers and human resources simply deny knowledge of the problem.

In contrast, the victim-survivor is stigmatised and condemned to silence in perpetuity, unable to defend themselves or even to talk about what happened.

What did the Jenkins’ report say about NDAs?

In the report, the Human Rights Commission has reiterated its serious concerns with the use of NDAs in Australia.

It says these agreements “should not be made a condition of settlement of complaints” because

NDAs been criticised as ‘covering up’ or ‘shutting down’ issues while protecting respondents.

Instead, the report says, NDAs should be optional for the complainant as a way of protecting their privacy, rather than a “blanket condition of settlement”.

What, then, can be done about this?

California has set the best practice in this regard, passing a law in 2018 that bans the use of NDAs in sexual harassment cases.^[7]

More recently, the state has built on this by passing the “Silenced No More Act ^[8]” in October this year. This legislation will protect workers who want to speak out about harassment and discrimination, even if they have signed a non-disclosure agreement. It also extends to workplace harassment or discrimination on any basis, not just sex.

In supporting the legislation, California Senator Connie Leyva said ^[9],

It is unconscionable that an employer would ever want or seek to silence the voices of survivors that have been subjected to racist, sexist, homophobic or other attacks at work.

How can the law be reformed in Australia?

It is clear NDAs have a chilling effect on people’s willingness to speak out against harassment and bullying. Significantly, these agreements not only silence those coerced into signing them, but also discourage openness and suppress transparency and accountability in workplaces.

They also have a detrimental, systemic effect by signalling to other employees they must self-censor if they experience similar workplace harms, rendering them fearful of speaking out.

The Set the Standard report – and the broader #MeToo movement – send a clear message: every workplace and organisation in Australia can, and must, do better to prevent an epidemic of bad behaviour.

It is, therefore, time for Australia to ban the use of NDAs in situations involving harassment or bullying.

We note others in Australia have also made such a recommendation. The Australian Law Alliance, for instance, has called for ^[11] banning the use of NDAs in all harassment and discrimination cases, except when requested by survivors.

Now that Jenkins has released not one, but two significant reports on workplace protections - both of which show the true extent of workplace harassment and silencing – we must take a step toward protecting victims by introducing laws to reform the use of NDAs in Australia.