'Leading businessman' with gagging order on sexual harassment claims could be named by MPs under parliamentary privilege

Theresa May says it is ‘clear some employers are using non-disclosure agreements unethically’

Lizzie Dearden
Home Affairs Correspondent
@lizziedearden
Wednesday 24 October 2018 16:46
Jess Phillips asks Theresa May about NDA's: 'It seems our laws allow rich and powerful men to pretty much do whatever they want as long as they can pay to keep it quiet'

MPs could use parliamentary privilege to name the “leading businessman” granted an injunction to prevent the media publishing allegations of sexual harassment and racial abuse.

Jess Phillips, the Labour MP for Birmingham Yardley, said she was “done with rich men using our laws to hide victims away”.

After calling for claimants in the case to contact her, she said she did not yet know the man’s identity and so could not reveal it in parliament during Wednesday’s prime minister’s questions session.

Speaking in the House of Commons, she said British laws appeared to “allow rich and powerful men to do whatever they want as long as they can pay to keep it quiet”.

Ms Phillips asked Theresa May whether she supported the use of non-disclosure agreements “to silence women who have been sexually harassed and others who have been racially abused”.

The prime minister said she could not comment on the ongoing court case but added: “Just as we won’t accept any behaviour that causes people to feel intimidated or humiliated in the workplace, there must be consequences for failing to comply with the law.

“Non-disclosure agreements cannot stop people from whistleblowing, but it is clear that some employers are using them unethically.”

She said the government would be consulting on measures to improve the regulation around the agreements and “make it absolutely explicit” where they do not apply or cannot be enforced.

The Court of Appeal barred The Daily Telegraph from publishing allegations from five employees of “discreditable conduct” and naming the executive accused.

A High Court judge refused to gag reports but the Court of Appeal overruled his decision and the dispute is going to trial

The unnamed firm immediately applied for an injunction when the newspaper requested a comment on a story revealing details of the allegations and how they had been handled on 16 July.

Sir Terence Etherton, Lord Justice Underhill and Lord Justice Henderson upheld a gagging order requested by a senior executive in a company group, plus managers at two companies in the group.

They found the complaints had been “compromised by settlement agreements” under which “substantial payments” were made to the employees who had complained.

Both sides had undertaken to “keep confidential” the subject matter of complaints in the non-disclosure agreements (NDAs), which were breached by complainants who spoke to The Telegraph, the judgment said.

NDAs are widely used by businesses seeking to protect trade secrets and commercial confidentiality, but there are concerns they can be abused to cover up wrongdoing and silence the media.

The Court of Appeal granted an interim injunction that overturned the August decision by a High Court judge who refused to prevent reports.

Justice Haddon-Cave said the information was “reasonably credible”, that there was no “reasonable expectation of privacy or confidentiality” and that a considerable amount of the information the newspaper wanted to publish was already in the public domain.

He concluded that publication of the information was “clearly capable of significantly contributing to a debate in a democratic society” and “making a contribution to a current debate of general public interest on misconduct in the workplace”.

The judge said that in his opinion, publication of the information would be in the public interest.

But the appeal judges said Justice Haddon-Cave had “left entirely out of account” the “important and legitimate role” played by NDAs.

“There is no evidence that any of the settlement agreements were procured by bullying, harassment or undue pressure by the claimants,” their ruling said.

“Each settlement agreement records that the employee was independently advised by a named legal adviser.”

The judges added: “The effect of each of the settlement agreements was to put an end to existing or potential litigation and enabled the employees to receive substantial payments … the real issue is whether, in the light of all the relevant facts, breach of that confidentiality is justified as a matter of public interest.”

Appeal judges said that the most serious elements of the allegations, which have been denied, were not in the public domain and there was a “real prospect” that publication could cause irreversible harm to the companies involved “due to adverse customer reaction”.

The trial will balance public interest and commercial harm, as well as human rights to private life and freedom of expression.

Ms Phillips’ Liberal Democrat predecessor, John Hemming, previously used parliamentary privilege to reveal the existence of super-injunctions granted to former Royal Bank of Scotland chief Fred Goodwin and name Ryan Giggs as the footballer who gagged press reports on his affair.

Parliamentary privilege affords members of the House of Commons and Lords legal immunity to ensure they can carry out their duties free from interference.

The Giggs scandal and a wave of other privacy controversies in 2011 sparked calls for legal reform, with MPs and campaigners saying practices barring the media in England and Wales publishing matters reported freely in Scotland, other countries and on social media were outdated and unfair.

A report by senior judges said super-injunctions – which ban reports of their own existence – had been used too frequently and that modern technology was “totally out of control”.

There have also been calls to limit the use of NDAs following the Me Too movement, after it was revealed that disgraced film mogul Harvey Weinstein deployed them to keep alleged victims quiet.

They have also been used in politics, with figures revealing that the House of Commons spent more than £2.4m through NDAs over the past five years.

In the wake of the Weinstein scandal, Ms May said in December that she would “look at” the use of NDAs.

The prime minister added that settlement agreements when someone leaves a company should not go further than protecting client confidentiality and commercial interest.