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Ban on Confidentiality Agreements and Non-Disclosure Agreements (NDA’s) is Growing, and May be Coming to a Neighbourhood Near You

Ban on Confidentiality Agreements and Non-Disclosure Agreements (NDA’s) is Growing, and May be Coming to a Neighbourhood Near You

Following an international trend, Prince Edward Island is the first province in Canada to pass legislation banning the use of confidentiality agreements and NDA’s as part of the settlement of sexual misconduct cases. Interestingly, this legislation that was passed on December 15, 2021 and comes into force in June of this year, is one of the most far reaching of its kind to be passed anywhere in the world. The PEI law doesn’t just ban the use of these types of agreements in the settlement of cases of sexual misconduct or sexual harassment, but also includes cases that involve racism, pregnancy discrimination, bullying, and other forms of human rights violations. While the application of the legislation is not confined to issues that arise in the workplace, the vast majority of these types of complaints and claims arise in the context of the employment relationship making this development something employers need to consider.

“Can’t Buy My Silence” is an international campaign to end the use of NDA’s in the settlement of specific types of cases that was started by Zelda Perkins and Dr. Julie Macfarlane. Zelda Perkins was the first woman to break her NDA with Harvey Weinstein which she had signed decades earlier. She was named Person of the Year by Time magazine in 2017 for her efforts. Dr. Macfarlane is a Canadian law professor and a member of the Order of Canada, who negotiated with the Anglican Church in 2016 to end their practice of forcing victims of clerical abuse to enter into NDA’s as part of the settlement of their claims. Later that year, she discovered that a law professor from the University of Windsor who had been terminated following an investigation for harassment and other misconduct, had been hired at another university that was unaware of his history because an NDA was in place. She was sued for defamation as a result of speaking out regarding the professor’s past conduct. The University of Windsor refused to disclose the letter of termination describing his misconduct resulting in Macfarlane being prevented from using the absolute defense of truth against the defamation charge.

Together Perkins and Macfarlane have successfully convinced legislators throughout the UK, US, and now Canada, that the use of NDA’s, or “gag orders”, that allow perpetrators of sexual harassment and other wrong-doing to move on without facing any accountability and prevents victims from being able to speak out about their personal experiences must be stopped. They have also advocated for other protections for victims including identity protection and more transparency and accountability by institutions and employers relative to their actions and treatment of workplace harassers, abusers, and bullies. Recently numerous jurisdictions have passed legislation banning the use of NDA’s to prevent the disclosure of factual information regarding cases of this nature.

Recognizing this trend, it is more important than ever that employer’s take a pro-active approach to preventing harassment and discrimination in the workplace. This goes beyond implementing policy and requires on-going education, monitoring, early intervention, solid disciplinary and performance management systems, and effective complaint and investigation procedures. The reputation of your business or organization may depend on it. Employer’s may not be able to shield harassers and protect their reputations going forward when settling these claims and the days of being able to remove the perpetrator and carry on without anyone knowing what happened are rapidly coming to a close.

For assistance in drafting harassment and discrimination policies for your business or organization, please contact Suzanne Polkosnik, Q.C.

Material in this article is available for information purposes only and is a high level summary of the subject matter. It is not, and is not intended to be, legal advice. You should first obtain professional legal advice prior to taking any action on the basis of any information contained in this article. This article is copyrighted. For permission to reproduce this article, please email Swainson Miki Peskett LLP: info@smpllp.ca