Guidance on aggressive CDAs

The Law Society of England and Wales (LSEW) has issued guidance to individuals about signing confidentiality agreements (CDAs or NDAs). This follows the scandals – if this is not too strong a word – of people being asked to sign extreme CDAs as part of settlement agreements, in both the UK and USA. A UK Parliamentary committee produced a report on this subject earlier this year.

What makes a CDA extreme is a matter of opinion, but candidates for this include:

  • not being permitted to retain a copy of the CDA
  • terms prohibiting disclosure of information, or the CDA itself, to one’s family, doctor, lawyer, in litigation or investigations (civil or criminal), or to regulatory bodies
  • financial penalties (e.g. recovery of money paid in settlement, or indemnities) for certain breaches of the CDA
  • not being permitted to make factual references to one’s activities during the term of employment
  • not being permitted to use information about one’s experience (e.g. of discrimination or harrassment) to support others bringing similar claims

The LSEW’s guidance to members of the public, Non-disclosure agreements: What you need to know as a worker, is disappointingly brief. In IP Draughts’ view, it pussy-foots around some of the concerns that have been highlighted in the Parliamentary inquiry. He would summarise the guidance as follows [followed by his comments in square brackets]:

  • agreements are hard, take legal advice [a bit self-serving by the body representing solicitors, but okay]
  • your employer may pay for this advice [IP Draughts has only seen this with settlement agreements at the end of employment, where getting a certificate from the employee’s legal adviser that they have given advice and that they have insurance is a pre-condition for the employer avoiding the effect of certain employment laws; moreover the amounts offered – typically in the range £250-500 – don’t really cover the costs of giving full advice on what are nowadays becoming excessively detailed and complex agreements]
  • if you are unhappy about a CDA that you have previously signed, take legal advice [see above]
  • it’s important that you understand what you have signed up to [no shit, Sherlock]
  • check whether the terms allow you to disclose to family members or your doctor, how long the confidentiality obligations last, and whether you can talk about your role in future job interviews [this seems a rather partial list of things to check]
  • you can’t be stopped from talking to the police and regulators [arguably the most useful information in the guidance so far]
  • the CDA may not be binding on you, e.g. if you didn’t have the opportunity to think about what you were being asked to sign or you couldn’t get legal advice [a rather downbeat way of making the point that some of these extreme CDAs are there to intimidate you and they may not be legally binding]
  • you should ask for a copy of the CDA [this could be expressed more strongly as, if you are not allowed to keep a copy, you should run a mile from signing the CDA]
  • CDAs can’t be used to stop whistleblowing, but this subject is hard and you may need legal advice on it [see above]

IP Draughts is left uncertain as to the purpose of this document. It seems to be a one-off rather than forming part of a set of guidance notes for consumers on different issues that affect them. He feels the key messages should be not to sign extreme CDAs, and that they are not “normal”; if you have signed them they may not be binding. But perhaps such a blunt message was too much for a body whose members act for employers as well as employees. Perhaps the LSEW felt it had to say something, in view of the criticism that has been directed to lawyers in cases such as those involving Harvey Weinstein and others. Like some other LSEW documents in areas of political sensitivity, it is a bit of a damp squib.

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