Yesterday we explained how #MeToo put confidentiality agreements under the spotlight and how their use where sexual harassment has been alleged is now under serious scrutiny. Follow this link if you missed yesterday’s post - Part 4, (or catch up on Part 1, Part 2, and Part 3).
Today we’re setting out practical guidance on what you should and should not do when drafting the settlement agreement and trying to conclude the negotiations where sexual harassment has been alleged.
In terms of confidentiality provisions, in light of the concerns raised as a result of the #MeToo movement, any confidentiality clause should use clear and specific language and the employee should always be allowed to keep a copy of the settlement agreement containing the confidentiality clause.
However, any confidentiality clause should not:
- seek to prevent the employee from discussing matters with the police, regulators, their health and care professionals, their professional advisers, or to whistleblow (and these exceptions should always be expressly listed in the clause);
- be used to improperly threaten litigation or other negative consequences, or exert inappropriate influence over the employee not to make a proper disclosure; or
- seek to stop the employee from disclosing future events.
Recent Guidance from the Equality and Human Rights Commission has advocated that these clauses should only be used where required, not as standard, and that employers should weigh up various factors including the benefit to the business in having the clause, the impact it would have on the employee, the impact it would have on the organisation’s culture, the benefits of not using it. As such, businesses should think carefully about whether a confidentiality clause is required at all, and if it is, be prepared to make it more limited than usual. For example, you may wish to put a time limit on the confidentiality provisions, or require that the employee just keeps the settlement agreement itself and the surrounding negotiations confidential (rather than the sexual harassment suffered).
In terms of other drafting points, you also need to be careful with warranties in the settlement agreement. The employee shouldn’t be asked to warrant that:
- they are not aware of any circumstances that would lead them to whistleblow or report a criminal activity;
- the complaints raised have been satisfactorily concluded (as mentioned yesterday, your investigation into the complaints should continue regardless of settlement); or
- that they will withdraw any complaints made to a regulator or ombudsman.
Finally be more patient than usual when conducting settlement negotiations. In general ACAS recommends 10 calendar days for the employee to take advice on a settlement agreement, but where sexual harassment has been alleged you should be more flexible to avoid making the employee feel like they are under unreasonable pressure to sign.