UK: Keeping It Confidential – Settling Sexual Harassment Claims

Last Updated: 27 December 2018
Article by Virginia K. Allen, Sarah Beeby, Ryan Carthew, Mark Hamilton and Jessica Pattinson

Recent media attention has once again brought sexual harassment in the workplace back into the spotlight. Discrimination, particularly harassment by another employee or by a group of employees, can impact an employer's business in many ways, including leaving employees feeling vulnerable even where the discrimination is dealt with appropriately and damaging the employer's reputation. In view of the latter risk it has been standard practice to settle claims of this nature using settlement agreements, which include a non-disclosure agreement (NDA).

On 13 November 2018, the Women and Equalities Committee launched an inquiry into the use of non-disclosure agreements in harassment and discrimination cases. The Committee sought written submissions on whether there are certain types of harassment for which non-disclosure agreements are being used, whether these agreements should be banned or restricted and the possible safeguards that may be necessary to curtail their unethical use.

When allegations of harassment or any other discrimination surface, employers clearly need to take action to establish what has happened. This is a vital part of the wider obligation to ensure as far as they can that their employees work in an environment that is free from harassment. However, harassment claims can be particularly tricky to investigate, thus putting employers in a difficult position. Often employers do not have any real certainty about what has really happened and have limited means available to them to establish the full truth of the matter. Nevertheless, the first step should always be to investigate the allegations fairly and to take disciplinary action where harassment has occurred.

Confidentiality, settlement and non-disclosure agreements

However, even where a matter is investigated and a harasser disciplined, there remains the need to resolve the claims to which that conduct gives rise. In doing so employers will quite understandably want to protect their businesses from adverse publicity and further liability. Hence the desire to agree settlements of potential claims as quickly and as quietly as possible. Most employers would expect any such resolution to involve an NDA.

Although the benefits of an NDA can seem like a good idea at the time, they have been the subject of considerable debate and indeed criticism. The Committee's inquiry highlights the concern that NDAs could be used to silence victims of harassment, to avoid having to deal with that harassment appropriately and, in the worst cases, allowing the harassment to continue. The confidential nature of these agreements inevitably makes it difficult to assess how ethically they are being used. In particular the current public concern focuses on ensuring victims of sexual harassment are not "bullied" or "bribed" into silence.

In what may be a response to these concerns it is notable that some organisations have recently started being more open about having had to deal with harassment claims. While not giving any specifics, several companies have recently made announcements that they have dealt with allegations of harassment, usually by dismissals. This approach recognises that there is more than one way of protecting an employer's reputation in these circumstances. One alternative to ensuring confidentiality about there being any issue at all is to be public about the issue and emphasise the organisation's zero tolerance to harassment by explaining that action has been taken.

This approach is, of course, dependent on the employer having responded to an allegation of harassment and then taken the appropriate action. However, this approach too is subject to limits and details of individuals should not be made public. Care also needs to be taken to respect the wishes of the harassed employee who may prefer total confidentiality.

Employers – what should you consider?

Allegations of sexual harassment are both a serious and sensitive issue. For employers, the Committee's inquiry is a reminder to investigate a victim's allegations of sexual harassment seriously and, while focusing on the individuals involved, not presuming from the outset that suppressing all mention of the issue is the best outcome for the organisation.

As part of ensuring, to the best of their capability, that their employees are working in an environment that is free from harassment, employers should:

  • implement regular and up-to-date training for all employees on harassment, victimisation and bullying in the workplace;
  • review policies on equal opportunities and harassment so they are up to date and being used effectively by all employees;
  • investigate allegations of sexual (or other) harassment fairly and formally with both the victim and the harasser;
  • where there is credible evidence (which sometimes can be the testimony of the harassed employee even if no other supporting evidence is available), take appropriate action to discipline the harasser in accordance with their disciplinary procedure; and
  • consider on a case-by-case basis whether an NDA is the best way forward.

Confidentiality is one option, but it is important to note that it is not the only option. By carefully considering these options and taking appropriate action in any particular case, employers can promote, as far as possible, an environment where employees are free from sexual harassment in the workplace and protect their reputation.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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