What is a gagging order and when are they used?

A “gagging order” is a term used to describe contractual confidentiality and non-disclosure obligations, usually in relation to specific allegations or events.

Blake Morgan Associate Madeleine Mould looks at gagging orders in detail in an article first published in Reward Strategy magazine, which was first published on 5 April.

General confidentiality clauses are a common feature in employment contracts and consultancy agreements, where employers are justified in protecting their confidential information to prevent unfair competition. Where an employee is involved with a particularly sensitive project or client, they may be asked to sign a specific agreement relating to information they create or receive in that context. This is generally accepted as legitimate, although even in these contexts, the limits to their confidentiality obligations should still be made clear as explained below.

The more controversial use of confidentiality and non-disclosure obligations is in settlement agreements (including COT3s – a binding agreement to settle Employment Tribunal claims), where allegations have been made of unlawful treatment. Although the use of such clauses first came under scrutiny at the outset of the “#MeToo” movement, allegations continue to be made about their inappropriate use… For example, Channel 4 have recently faced negative press coverage in relation to the alleged use of such clauses in the settlement of equal pay, discrimination, harassment and victimisation claims. In the US, NBC News released all former employees who had signed non-disclosure agreements in relation to sexual harassment claims, and UK broadcasters are facing similar calls.

Limits to confidentiality and non-disclosure obligations

Settlement and the imposition of confidentiality obligations should never be the first response to allegations of discrimination, harassment or victimisation and certainly not a default position. Allegations should be taken seriously and thoroughly investigated and, where wrongdoing is found to have occurred, appropriate steps should be taken in response. Covering up potential issues is likely to lead to a toxic workplace culture, reoccurrence or escalation and, as we have seen in recent years, damage to the employer’s “brand” both internally and externally.

Is there still a place for confidentiality and non-disclosure obligations?

Confidentiality and non-disclosure obligations are likely to remain a common feature of settlement agreements, although employers should think carefully about whether they can be justified in each case before including them, and think carefully about how they are drafted.

If drafting one, employers should consider making confidentiality obligations mutual: the argument for drawing a line under the matter and allowing the parties to move on is stronger where the employee also benefits from the confidentiality agreement. If the employer is unwilling to agree to keep the matter confidential, that would question the legitimacy of asking the employee to do the same. Clauses should be clearly drafted and, insofar as possible, limited to the specific issues for which the parties agree a non-disclosure agreement is justified.

Read the article in full here and contact our employment law experts if you need any legal advice on gagging orders.