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non disclosure agreements

Should Non-Disclosure Agreements be Banned in Workplace Settlements dealing with Sexual Harassment or Violence?   

The world as we have created it is a process of our thinking.  It cannot be changed without changing our thinking”.
Albert Einstein

On November 6, 2023 the Ontario Provincial Government announced that it was “proposing to conduct consultations on ending the use of NDAs (non-disclosure agreements) in the settlement of cases on workplace sexual harassment or violence.” In employment law,  settlement documents contain non-disclosure provision(s).  The employee sexually harassed or subjected to violence in the workplace may have a settlement term that includes the payment of general damages as compensation for being subjected to this conduct but a robust NDA prohibits the employee/ex-employee from disclosing to any person (with certain exceptions) the circumstances giving rise to the claim including the nature of the claim(s), and the terms of settlement.  At a minimum, a settlement agreement includes a term that a person cannot disclose the terms of settlement. Where a party is prohibited from disclosing the terms of settlement, this prohibition means not only can you not disclose how much you were paid, but you can not disclose that you received a payment, or disclose the nature of the claims settled.  

In the past, a complainant of workplace sexual harassment did not speak out in fear of not being believed or in fear of being terminated for bringing a complaint – the complainant remained silent.  The continued inclusion of NDAs in settlement agreements in this context continues to silence victims.  Understandably, this results in the complainant feeling invalidated and victimized again because the offender’s identity and his conduct can not be disclosed, or that there was any settlement for the claim. Confidentiality clauses/NDAs have traditionally been an integral part of workplace settlements but we are in a different era now and what was once considered the norm in settling cases should no longer be acceptable in a society that has undergone a transformation in the workplace on sexual harassment and violence.  We need to examine the purpose of an NDA/non-disclosure provisions in settlement agreements (generally) and keeping in mind that all the allegation(s) made have not been proven in court to determine how we can achieve the goals being sought from the elimination of NDAs in this context. To completely remove NDAs will likely make settlement very difficult in these type of cases and either result in more litigation or deter people from proceeding with their complaints knowing that the matter will have to proceed to litigation.  Furthermore, it does not benefit the complainant to be able to disclose the actual settlement amount paid out for this particular claim. In fact, it will hurt the complainant in the negotiation process.  If the complainant is able to disclose the settlement amount paid by the company for these type of claims, this will result in the company offering a modest amount to settle these claims because to do otherwise, will result in other complainant(s) seeking the equivalent amount of money from the company given that a precedent has now been set.  

The primary goal of the elimination of NDAs in these circumstances should be the “deterrence” of sexual harassment and violence in the workplace.  It is not necessary to completely eliminate NDAs to do this.  

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