What is an NDA?
An NDA is a Non-Disclosure Agreement, also referred to as a Confidentiality Agreement or "gag order." It is an agreement in which one party agrees not to speak to any number of facts in relation to a particular incident, typically in exchange for compensation. The non-disclosure section is typically a smaller part of a larger agreement.
Where did NDAs come from?
Originally, NDAs were used in cases involving proprietary information or trade secrets. They were specifically designed to keep parties from entering into agreements that disclosed confidential information or materials. If an individual or party disclosed this private information after signing an NDA, there would be recourse through the courts for damages or compensation for the breach of confidentiality.
Over time, the use of NDAs has expanded significantly, where they are now commonplace in many settlement agreements involving all types of cases. This has become increasingly contentious in cases involving sexual assault, as well as harassment and discrimination, where NDAs have been seen to silence survivors and protect perpetrators.
Changing Landscape in Abuse and Harassment Cases
With the sweeping social media #MeToo movement, NDAs, their use, and their consequences, have become a topic of debate. As a result of a number of advocacy movements, the legal and political landscape around the use of these agreements is changing: from use in all cases, to use in limited or exceptional circumstances.
On February 9, 2023, the Canadian Bar Association's membership, a professional association made up of lawyers, judges, notaries, law teachers and law students from across Canada, voted 94 per cent in favour of discouraging the widespread use of NDAs in cases of harassment and discrimination. They plan to advocate for governments in Canada to narrow their use to specific scenarios. For example, encouraging their use for protecting intellectual property, yet discouraging their use to "silence victims and whistle blowers who report experiences of abuse, discrimination and harassment in Canada". More details on the resolution can be accessed here.
On March 9, 2023, BC Green Party leader Sonia Furstenau tabled Bill M215 the Non-Disclosure Agreements Act, which restricts the use and content of non-disclosure agreements relating to cases of discrimination and harassment, including sexual harassment.
This legislation, if adopted, will restrict the use of NDAs, specify terms in the agreements, as well as provide for exceptions. The bill seemingly attempts to balance the need for confidentiality in some specific circumstances with the need for reporters of abuse to be able to speak about their experiences. The proposed legislation also importantly provides agency to the individual reporting the harassment or discrimination in whether or not confidentiality terms will apply to the agreement, how long they may last for, and how restrictive they might be.
As such, Bill M215's Section 2 provides:
2 (1) A respondent must not enter into a non-disclosure agreement in respect of discrimination or harassment or allegations of discrimination or harassment with a person who is a relevant person in relation to the discrimination, harassment or allegations unless
(a) the agreement is the expressed wish and preference of the relevant person,
(b) before entering into the agreement, the relevant person has a reasonable opportunity to receive independent legal advice,
(c) there are no undue attempts to influence the relevant person in relation to the decision to enter into the agreement,
(d) the agreement does not adversely affect the health or safety of a third party or the public interest,
(e) the agreement includes
(i) an opportunity for the relevant person to waive the relevant person's own confidentiality, and
(ii) a process for waiving confidentiality, and
(f) the agreement is of a set and limited duration.
(2) A non-disclosure agreement entered into in contravention of subsection (1) is void.
The legislation also includes punitive measures if a party violates the legislation setting out offences and fines for failing to comply and attempting to use improper NDAs.
This is an important step for survivors of sexual abuse, harassment and other forms of discrimination. It remains to be seen if the legislation will come into law and what the final form the bill might take.
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