The Legal Services Board (LSB) in the UK is investigating the role lawyers play in the way companies use non-disclosure agreements (NDA) to conceal wrongdoing in the workplace. The board said concerns are mounting about the misuse of NDAs to conceal wrongdoing and silence victims of workplace misconduct.
In a call for evidence — in the wake of allegations of rape at the largest business lobby group, the Confederation of British Industry (CBI) — the board said it is also looking at how regulation might help lawyers avoid compromising their professional ethical obligations.
The board noted around 799 cases of workplace harassment captured by Speak Out Revolution, a non-profit that collects data to highlight the issue. Among these cases, 80 per cent were experienced by women, 25 per cent of the individuals reporting the issue said NDAs had been used to prevent them from talking about their experiences, and 34 per cent said they expected they would be asked to sign an NDA.
The LSB also flagged a survey by campaign group Pregnant Then Screwed of 260 women who said they experienced pregnancy or maternity discrimination and subsequently signed NDAs. Among the group, 91 per cent said they felt signing NDAs was their only option, while 70 per cent experienced poor mental health as a result of signing the NDA.
In its consultation, the LSB noted NDAs were suitable for protecting confidentiality and sensitivity around business information and ideas. But it added that “there is evidence of misuse of NDAs to conceal unlawful activity, such as discrimination, harassment or abuse.” In these instances, lawyers can be asked to draft, enforce or advise on what amounts to an unethical or illegitimate use of NDAs, the board added.
“Vulnerable individuals who are the targets of discrimination, harassment or abuse may be asked or coerced through an imbalance of power to sign them. There is an active question to be addressed about the professional ethical conduct of legal professionals who assist, enable or facilitate such misuse of NDAs,” the board said.
LSB chair Matthew Hill said in a statement that the watchdog wants to ensure regulation helps lawyers to ensure NDAs are not to cover up wrongdoing or deprive individuals unwittingly of their rights.
“We’re interested in hearing from anyone — whether the real experience of people who have been subject to misuse of NDAs, practitioners in this or related fields, regulators, representative bodies and others — to help identify solutions that uphold public confidence,” Hill said.
It’s to be noted that the incoming global chair of accountancy giant Deloitte is set to stand down from the board of the scandal-hit CBI. Senior Deloitte audit partner, Anna Marks is chair of the CBI’s audit committee and a non-executive director of the board. She is set to stand down from both CBI roles, a spokesperson for Deloitte said.
Marks is one of the Big Four firm’s most senior partners. She will be taking over as chair of Deloitte’s global board of directors from June 1. She currently sits on Deloitte’s global board, as well as its north and south Europe board, and is a vice-chair of Deloitte UK.
Marks’ exit from her role at CBI comes as major businesses, including Deloitte, rush to distance themselves from the CBI (as mentioned in these columns two weeks ago) following allegations that senior staff at the lobby group had committed acts of gross misconduct.
The organisation said on April 21 that it was suspending its operations until an extraordinary general meeting in June to decide its future.
“The CBI shares the shock and revulsion at the events that have taken place in our organisation, and at past failures that allowed these events to happen,” the CBI said in a statement.
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