Wednesday, January 16, 2019
This document considers the ideas emerging from a Centre for Ethics and Law think tank on nondisclosure agreements and lawyers' professional ethics in the light of the #MeToo and associated scandals.
It considers the use of unlawful and marginal NDA clauses, the processes of negotiating and executing such agreements, and issues to be considered by lawyers and those regulating them.
In broad terms the following clauses were all seen as problematic:
a. Restrictions on reporting to the police, regulators and other authorities including giving the other party notice before doing so.
b. Limits on the ability of the individual party to seek professional advice or counselling after entering into the agreement because the confidentiality agreement is too stringent.
c. Clawback / forfeiture clauses under which in the event of breach of confidentiality, derogatory statements or nonassistance provisions settlement monies may be forfeited and, if already paid, required to be repaid, potentially with costs of recovery, especially if coupled with other aggressive terms.
d. Terms that are legally potentially unenforceable – e.g. blanket confidentiality provisions and clawback provisions, as well as restrictions on reporting potentially criminal behaviour to the police or making any “protected disclosures” under whistleblowing legislation.
e. Restrictions on keeping a copy.