Women and Equalities Committee
Oral evidence: The use of non-disclosure agreements in discrimination, HC 1720 (Private Session)
Wednesday 24 April 2019
Ordered by the House of Commons to be published on 24 April 2019.
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Members present: Mrs Maria Miller (Chair); Tonia Antoniazzi; Angela Crawley.
Questions 825-851
Witness
I: (In private) Witness F.
Witnesses: Witness F.
Q825 Chair: Hi. Lovely to see you. Thank you so much for coming in today. We are really grateful to you for giving us your time to give evidence as part of our inquiry on non-disclosure agreements. This is a private evidence session, which is really important, because people can speak more freely. Obviously, you are covered within the session by parliamentary privilege. In terms of the people in the room, behind you are our two specialist advisers. The gentleman in the corner—actually, are you both Hansard? No. You’re Hansard—[Interruption.] You are audio. I’ve been introducing him as Hansard. I’m sorry. There are various other members of staff. There are three Members of Parliament for this session. I am Maria Miller, Member of Parliament for Basingstoke, and I chair the Committee.
Tonia Antoniazzi: I am Tonia Antoniazzi, MP for Gower.
Angela Crawley: Hello. I am Angela Crawley, MP for Lanark and Hamilton East.
Chair: And these two ladies are our two Clerks.
We have some questions and we are going to be about half an hour, if that’s okay. I will start by asking if you can tell us what made you want to give evidence to the Committee in the first place about the use of NDAs in discrimination cases.
Witness F: It’s mostly because I think that they are very useful, and from what I can understand from what my lawyer was saying, a lot of evidence has been given so far against their use, and I wanted to give the other side of the argument.
Q826 Chair: Brilliant. What led you to sign an NDA?
Witness F: I think I gave a statement yesterday about what happened at one of my employers. I guess the reason I signed it was because it was definitely the best outcome for me. If I hadn’t signed it, I would have had to go to tribunal and I definitely didn’t want to do that and didn’t really necessarily even have the funds to do that, either. For me, it was about having some sort of settlement from a bad situation and being able to move on with my life.
Q827 Tonia Antoniazzi: It is interesting that you decided to settle rather than pursue the tribunal claim, which you have explained. What outcome did you want from the whole process?
Witness F: Basically, [details of employment]. The outcome I wanted was actually some justice in general, in terms of not being just completely pushed out of [organisation] for something that was not my fault; and also in a discrimination/harassment case in general, I am the victim, and therefore, to be the victim and then on top of that to be pushed out of [organisation], I was seeking justice but also I was seeking the financial outcome, which was allowing me to put it to bed and move on with my life, really.
Q828 Tonia Antoniazzi: Did the financial aspect—
Witness F: The financial aspect was very big. Ultimately, I would have loved to have had justice in general for the perpetrator, but that was not my primary aim. My primary aim was to move on and get what I deserved from the company.
Q829 Tonia Antoniazzi: Did you feel that there might be any reputational damage? Is that why you agreed to it?
Witness F: No; I agreed to it because I got the financial settlement that I wanted. If I had not got that, I would have taken it to tribunal, but it would definitely have been pretty disastrous, to be honest, because I was [age] I think at the time, or much younger, and just starting my career. I was having a good time and enjoying what I was doing. If I had taken it to tribunal, I would probably have been very unemployable in the future. I would have had a very bad reputation, probably—not that I had done anything wrong, but I think in general with these things, once you go to tribunal, employers look at the fact that you have sued someone in the past. I do not think that reflects well on me, even though it is not my fault.
Q830 Tonia Antoniazzi: Did you have advice about the different options available to you?
Witness F: Yes, I had great advice, and to be honest, I am very lucky that I could afford to have the best legal advice. Without it, I would probably have struggled. It was definitely critical to getting the outcome that I wanted.
Q831 Tonia Antoniazzi: What impact did the option of signing the NDA have on the settlement negotiations? Do you think as a result you were better off?
Witness F: One hundred per cent. Without the NDA, there is absolutely no way I would have had any positive outcome from this. Ultimately, it was my only leverage over the person in question. If there was no real threat—if there was no ability for that person to silence my accusations or allegations—the only outcome would have been me going to tribunal and dragging both our names through court, and neither party wanted that.
Q832 Tonia Antoniazzi: Are there reciprocal NDAs?
Witness F: Yes.
Q833 Tonia Antoniazzi: And do you think it affected other terms of the settlement? Was there anything else that was impacted or was it just financial?
Witness F: It was pretty much financial. Ultimately, the purpose of it was to make me be quiet. For me, it was to get the money out of that situation so I could move on. I do not really know what else was affected, to be honest.
The longer-term impact of it—the only issue I have in general with NDAs in these circumstances—is the fact that the clawback provisions are often very onerous. My lawyer likes to describe them as draconian. Basically, they put you in a position where—on me talking to you today, for example, I am not actually sure whether it is even allowed by the settlement agreement that I have.
If I was found to have breached my confidentiality agreement, even in this room, I would have to give back every penny, and also damages and everything that comes from that, which I find difficult, because ultimately I am the victim here. If it did come out somewhere, the person who was the perpetrator should just live with the fact that they have done what they have done. It should not be on me to hold their secret.
If it does get out into the public, I am the one who has to repay every penny. To be honest, that is unreasonable because, if you take into account tax and things like that, I would be paying back more money than I received in the first place, not to mention the fact that you use that settlement to move forward with your life. If in five years’ time I accidentally say something to someone, or someone finds out through some other means and my former employer decides that it was my fault, they can come after me and get all that money back, or at least try to get it back. It is a weight that hangs over you for the rest of your life. That is the main issue for me. It is not the existence of the agreement; it is the longer-term provisions in the agreement. It is about not allowing such draconian measures.
Q834 Chair: Do you think that is the same weight that hangs over [other party]? Do you think they would say that it is a weight that hangs over you for the rest of your life?
Witness F: I think that people like [other party] have probably done this many times to many people and are very comfortable with the NDA situation. I think they put such onerous conditions in the terms to scare people like me to be quiet and not just to look at it as a piece of paper that they have signed to get money. I think they make them specifically very threatening and aggressive so you are quite fearful. I am not sure that the specific person in this instance really cares that much, to be honest. It was a drop in the ocean, given the level of wealth that that person has, so I don’t think they really see it as that much of a deterrent, but I think they are very grateful that they can silence me.
Q835 Angela Crawley: What legal advice were you given before you signed the NDA?
Witness F: I was given lots of advice. It went on for about a month. I was told my options, and they helped me craft my responses, even before the perpetrator knew that I had sought legal advice, so they were very helpful in general. What specifically were you referring to?
Q836 Angela Crawley: Do you feel you were given the advice and support you needed to make an informed choice before signing the NDA? With hindsight, do you think that additional advice or support would have been helpful? If so, what type of support would have been helpful to you?
Witness F: Hindsight is always a beautiful thing, but at the time you can’t possibly know what is going to happen. It is a very, very stressful time, so when there is a settlement on the table, your main priority there and then is just putting an end to whatever is going on, and not thinking, “How is this going to affect me in five years’ time?” I think that even if someone had given me the advice then, I wouldn’t have changed my decision. You just want to put it to bed. The advice I had was great; there wasn’t really any issue with that.
The bigger problem is the leverage that the other party has over you. Whatever conditions they put in the settlement, you are at an extremely stressful point in your life, and the risk is that you go to a tribunal that you can’t afford, ruin your career and ruin your future. Your choices are to settle for that amount with those provisions or continue and risk everything. No amount of advice at that point in time is going to alleviate that problem.
Q837 Angela Crawley: Were you ever given any advice about protected disclosure or your ability to whistleblow? Were you aware that that was possible?
Witness F: I was, but to be honest I can’t remember much about what was said. It was secondary to what was going on. I remember having conversations, but I can’t remember what was said, and I can’t really remember the advice.
Q838 Angela Crawley: I have one last question that is not specific to what was covered. You spoke about the financial settlement and the ability to move on with your life—I think you said that it was the best outcome—but you have also spoken about the other side, the exertion of power and the imbalance. I think “fear” is the word you used. Do you think that the financial benefit outweighs the long-term impact of the NDA and the fact that you feel bound by it?
Witness F: I think it does. The reality is that only coming to a Committee like this really brings up any of that past. Other than that, it is something that is just in my past. No one really talks about it. It is not brought up. It is not relevant, so you can put it to bed quite easily. When things like this come along it brings up that reminder that it is a lifelong agreement. On the financial impact, the reason why it outweighs it is because, if I had left the business without it, I would be back to square one, probably struggling to find another job, especially one that paid as well as the one I was in. I would have had next to no savings and would generally have had a bit of a tough time, to be honest.
Instead, because of the financial settlement, I was able to start a new business and enjoy a comfortable life in the following months afterwards. I felt genuinely really good and it bought me the time to focus on what I wanted to do with my life. It genuinely bought me the time to take a really bad situation and make it really positive. For me, it definitely outweighs it, because I don’t know what the alternative would be, but it would not be as good as my current situation.
Q839 Tonia Antoniazzi: You talk about the NDA having made it easier for you to move on with your life. Has it been an issue with regard to your career? For example, you have to describe your employment history with prospective employers. If there is a gap or anything like that, has that been an issue for you in job interviews?
Witness F: Not really. The biggest thing is that in the aftermath you need to come to terms about how you talk about it. You pretty much have to write a script for yourself of what to say. Once you know what to say and are comfortable with it, you refer back to that. The hardest part is defining what your story is in a way that is clearly not telling white lies or whatever, but covers what needs to be said without infringing on your confidentiality agreement.
Q840 Tonia Antoniazzi: We’ve taken evidence from people on whom it has had a massive impact and they have not been able to rewrite their story and have their script. That is quite interesting. Has the financial settlement enabled you to be more entrepreneurial and move on?
Witness F: Yes. It gives you a certain freedom not to be rushed into the next thing you are doing. You can take a step back, take some time off, re-evaluate everything. The saddest thing for me is that, if people don’t have access to the right legal advice, or they don’t have the means, that is the biggest problem.
If they had a lawyer as good as mine and they were strategic about things, they would probably view it as a potentially good thing in a weird way. They could use this as a stepping-stone to a better life, even though it is something terrible that has probably happened. If you have the right legal advice, often you have all the leverage. In a lot of scenarios, including mine, pressure is put on you by the other parties. They intimidate and there are lots of very dark things that go on in that period when you are not sure what is going on, and lawyers can help you massively.
Q841 Tonia Antoniazzi: Has it had an impact on your wellbeing?
Witness F: No, not really. I was definitely very anxious at the time but, now I look back on it, I’m quietly proud of standing up for myself and winning against the odds, against someone who is a lot more powerful and wealthy.
Q842 Tonia Antoniazzi: I think I know your answer, but do you have any regrets or concerns about having signed your NDA?
Witness F: My only real regret is that the person in question didn’t actually see any real justice. They just basically paid someone off. For people like that, they can pay them off very easily, even the amounts in question, which are reasonably large by any normal person’s standards, so it’s not the same.
Perhaps my real regret is that I would love to have that person see more justice than simply signing something and moving on. But at the end of the day that is me just being a little bitter, more than anything. It is not important for the world.
Q843 Tonia Antoniazzi: But do you think that is important for other people who will be in the same situation as you?
Witness F: I think so, yes. That would be the main takeaway for me: it is great if you have the right legal advice for you individually and you manage to be successful in getting your way. For people who don’t, and the future of that person in particular, I’m not sure they learn a lesson from this process.
Q844 Tonia Antoniazzi: Earlier you said that if you broke the NDA you would have to pay the money and the tax back. What else do you think might happen if you broke the NDA?
Witness F: If the story itself found its way to the press, it would probably be very damaging to me and also to the other person. It is a two-way street. When I talk about justice, I would love the person to be outed or revealed as having done something, a bit like the Philip Green scenario, but the people who that person has wronged remain anonymous. The problem is that in these situations the parties do not stay anonymous, so the victim will get dragged into the mud as well.
Q845 Chair: I have a few final questions. You have touched on it there. You said that you feel the use of NDAs is a good thing. It has helped you move on, but do you have any concerns about the use of NDAs? You were just talking about using them in the Philip Green case and how they are used as a way of covering up repeat behaviour. Doesn’t it worry you that maybe the individual who you were connected with might continue to act in this way and that that behaviour will not be stopped?
Witness F: My play on that one is that these people are extremely creative about how they break the rules. Whatever rules you put in place, they will continue to exhibit these behaviours. Whether you ban NDAs or not, they will find creative ways of manipulating the law. Basically, they are compulsively doing these bad things. My personal opinion is that I am not sure about banning NDAs. All they will do is harm the people who have been wronged and their ability to seek recourse. The biggest problem is not even getting a settlement or not. It is the fact that victims probably will not even pursue it. If they do not have an NDA as leverage, they will not even dream of going to a tribunal where the costs will be enormous. They will be fighting against extremely wealthy—or at least more wealthy—businesses or individuals, so ultimately these people will not see any justice at all. At least an NDA gives some comfort to the person who is the victim and also goes some way to at least reminding these people that they are wronging other people.
But I agree completely. I do not know what the perfect solution looks like, but I worry that if you remove NDAs the damage will be bigger than if you did not have them at all.
Q846 Chair: But do you think they should be restricted in any way? You talked earlier about intimidation and dark things happening when you were going through your legal process, and that this has put a weight on you that hangs over you for the rest of your life. You do not strike me as somebody who is terribly old, and that will be quite a long time. Are there any things that could be changed that might make it less of a dark experience and not so intimidating?
Witness F: If there was some way to give a minimum level of legal coverage to people so that everyone gets a good lawyer or at least good legal advice at the right times, and if there was almost something mandated, like you can’t sign an NDA in a discrimination case without certain levels of advice being given, that would help in general to level the playing field a bit.
As for the longer term, I think the provisions in the clauses should also be looked into. I mean, if I read you the actual clause, it is ridiculous. It says something like, “If anyone, anywhere, ever even knows about the existence of my agreement”—not even the allegations within the agreement but just the existence of my agreement—“then I am liable to repay everything, in perpetuity.” That is not particularly fair.
Q847 Chair: You used the word “draconian.”
Witness F: My lawyer loves to use that, but—
Chair: Your lawyer used the word “draconian.” That sounds as if it is verging on the unenforceable. Is that something that your lawyer talked to you about?
Witness F: As in?
Q848 Chair: I mean, is it actually something that would stand up in a court of law, if they decided to take action against you?
Witness F: I think the problem with that is that I wouldn’t want to go to a court of law about this and neither would—I don’t know exactly what would happen, to be honest. However, I think the bigger problem is that I would not necessarily have the legal means to represent myself in that scenario, and the other person has unlimited means, or at least relatively unlimited means.
In the first place, I think that if there were some stipulations around whose liability it is if something does get out, or at least limiting the liability, that would be good. For example, rather than repaying every penny of everything just because someone finds out about the existence of your agreement, what about if it was just limiting the actual damage suffered to the perpetrator? If there is no damage, then it doesn’t really matter.
Q849 Chair: That is a very good suggestion. You also talked about there being no justice for the perpetrator.
Witness F: Well, limited justice.
Chair: Limited justice—a small, loose change-type justice for an individual who is of wealthy means. In your experience, what sort of justice might be a useful tool to have in your armoury if you are negotiating in that situation?
Witness F: Perhaps the person losing their position of power or privilege. They don’t necessarily have to be outed and have their entire life ruined, but for them to be in a position to lose their position of power—whether it is their job, their credibility or whatever—and actually suffer beyond financial means, then I think that would be fair justice. I don’t think it is about having their name in the papers and their lives being ruined, but I do not think they should be in a position of power in the first place.
Q850 Chair: So, a link to directorships or something?
Witness F: Yes, for example banning them from being a director in Companies House. I don’t know what measures you could think of, but if there were ways to enforce something like that, it would be brilliant. I don’t know if any of that is possible.
Q851 Chair: Something that is more than financial?
Witness F: Yes.
Chair: Thank you so much for your time today. It has been incredibly helpful to talk to you about it and I am so pleased that it helped you move on in your life—that was great to hear. I will just say that this is in total confidence. We are not going to refer to your case at all. We will make sure that you see a copy of the transcript of this session, and if you think there is something in there that you would rather have redacted for public use, then we are obviously very happy to do that. We do not want to compromise your position at all.
Witness F: Thank you.
Chair: Thank you very much for your time. That is the close of our evidence session.