Former cabinet minister Louise Haigh has called for an end to a ‘two-tier’ system in how businesses use non-disclosure agreements.

The former transport secretary addressed colleagues in a Westminster Hall debate today (2 April) calling for bosses to be banned from the “improper” use of NDAs against low-paid workers in sectors such as hospitality or retail.

Last month, Haigh tabled an amendment to the Employment Rights Bill that would bring an end to the misuse of NDAs, calling for them to be banned in cases of harassment, discrimination and abuse unless the victim specifically requests.

She referenced a recent campaign in the hospitality sector called Can’t Buy My Silence, which found that NDAs and confidentiality clauses were repeatedly too broad. The campaign also found that NDAs disproportionately affected women and low-income workers.

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Haigh told MPs: “The point is that these clauses have become boilerplate. They are signed unwittingly by workers and, in many cases, are required unwittingly by employers with little or no understanding of the consequences.

“It has become standard practice to include these broadly drafted confidentiality clauses in contracts that go far further than is required to protect commercial confidentiality or trade secrets.”

The Higher Education Act 2023 prevents universities from entering into NDAs with staff, students or visiting speakers in response to complaints of sexual misconduct or harassment. Haigh is keen for government policy to align protections with those enjoyed in the academic sector.

She added: “NDAs are one tool of oppression, essentially, used against workers after they have been abused or discriminated against in the workplace.

“Since the [Employment Rights Bill] debate last month, I have been inundated with details of such cases.

“There was the woman who was raped by a colleague at work but had signed a confidentiality clause that explicitly prevented her from discussing the issue even with medical professionals, making it impossible for her to recover from her trauma.

“An employee who signed an NDA on leaving her workplace has since been effectively blacklisted, because her former employer is undermining her to prospective employers, while she cannot tell her side of the story.”

Haigh went on to cite examples from mental health charities, news organisations and even trade unions where managers are “exploiting this practice”.

“We have to accept that it is a serious problem in every type of workplace in this country and that employers simply cannot be trusted with this tool at their disposal,” she added.

She noted that a number of states in the US have passed legislation preventing the misuse of NDAs and described the UK as an “outlier” in not acting more stringently against them.

In Ireland, there is a general ban on the use of NDAs by employers with prospective, current or former employees where there have been allegations of discrimination, harassment or sexual harassment.

“Let this Labour Government lead the way on protecting victims and survivors in the workplace and finally bring an end to legalised abuse,” she said.

Research by the Legal Service Board last year found that signing an NDA can have “devastating impacts” on the individual and cause them mental health issues.

Reports of NDA misuse have been widespread in recent years, including reports that the CBI used NDAs to prevent staff from discussing experiences of sexual harassment and bullying.

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