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Boardroom Secrecy

11 Apr 2019

At a time of increasing calls for transparency at all levels of public and private operations, two recent developments have caught the eye of legal practitioners advising North East businesses.

Non-disclosure agreements

Non-disclosure agreements and confidentiality clauses in settlement agreements are widely used and can have useful applications to both employers and employees to keep certain matters out of the public eye. However, new Government measures have been announced seeking to clamp down on the use of confidentiality agreements which prevent individuals from reporting crimes, harassments or discrimination to the police.

This comes in the wake of the #MeToo movement and the recent reports that Sir Philip Green used non-disclosure agreements to silence allegations of sexual and racial harassment from 5 separate members of staff, with significant pay outs. The new proposals include:

  • prohibiting confidentiality clauses that prevent individuals from speaking to the police and reporting crimes;
  • requiring clear descriptions of rights before signing confidentiality clauses contained in employment contracts or settlement agreements; and
  • widening the law requiring a worker to receive independent legal advice prior to signing a settlement agreement.

In addition, a new generation of apps inspired by the #MeToo movement are being launched with the aim of assisting victims of sexual harassment at work to speak up. As a result of this new technology, users may be notified if others in their workplace have also recorded an incident to encourage group reporting.

Employers should continue to stay aware of developments in this area as well as ensuring that their equality and harassment policies are up to date and staff are appropriately trained.

Internal Emails

A recent case involving West Ham Football Club and their landlord at the London Olympic Stadium has provided useful guidance on the limited extent of litigation privilege (whereby certain documents, including emails, do not have to be disclosed in legal proceedings).

Hay & Kilner Employment Law Solicitor Tom Clarke

During litigation regarding the number of seats permitted in the new football stadium, the landlord, E20, withheld a number of internal emails, claiming they were privileged on the basis that they were prepared for the dominant purpose of obtaining advice or evidence for litigation. However West Ham argued that the emails were simply internal discussions of commercial settlement proposals concerning the dispute.

On appeal, it was held that the emails must be disclosed as they did not meet the threshold required for litigation privilege as the internal emails contained purely commercial aspects of settlement and no legal advice.

Although this case will not ‘open the floodgates’ on disclosure, it’s an important reminder that courts are increasingly likely to carefully inspect documents claimed to be subject to litigation privilege and damaging emails may in fact be disclosable.

For companies, the case serves as a timely reminder to exercise caution when creating or sending internal documents. Courts may no longer accept a blanket claim of privilege so companies may find it useful to move away written communications regarding settlement discussions and back to face-to-face communications where litigation is ongoing.

Indeed, given the significant increase in data subject access requests since the implementation of GDPR, being mindful of the contents of all emails, particularly between senior people in the organisation, will always be good advice.

For more information on any of the above, or how we can help you, please contact Tom Clarke, or call 0191 232 8345.