11 May 2019

non-disclosure agreements

Addicted to secrecy

  • NDAs are not just for celebrities like Ronaldo. Their use is widespread across Britain’s public and private sectors
  • Part two of our investigation shows how they are misused to bind current and former employees to secrecy
  • Hundreds of millions of pounds of public money have been spent potentially hiding inefficiency and wrongdoing

By Paul Caruana Galizia

From film mogul Harvey Weinstein to football star Cristiano Ronaldo, we think of non-disclosure agreements (NDAs) as gagging orders used by the rich and powerful to silence allegations of sexual harassment, bullying and discrimination. But the use of NDAs in British public life is so widespread that it implies many public bodies are almost addicted to the controversial confidentiality agreements.

Evidence gathered by Tortoise reveals that thousands of people working for public hospitals and local authorities are subject to NDAs, preventing them from ever revealing details of conditions and practices they encountered at work.

The details are incomplete – more than 100 local authorities failed to respond to freedom of information requests – yet they show 359,000 people have signed NDAs in return for compensation of £190m since 2014.

The real price that local councils pay is higher. These figures represent the value of the settlement paid to the settler and exclude the legal costs paid by councils to reach the agreement, which can range between £300 and £6,000 per case.

A single authority – Stoke-on-Trent City Council – signed 946 and paid out nearly £22m in that five-year period.

Andrew Pepper-Parsons, head of policy at the whistleblower charity Protect, says the data shows that “NDAs have become standard practice”.

“Most NDAs are neutral,” Pepper-Parsons says, “but some organisations use them without even knowing why.”

Local authorities say they have simply used NDAs as a standard feature of employment contracts and redundancy settlements.

A Stoke-on-Trent council spokesman said the agreements were “in the main” for redundancy settlements, adding that “[most] NDAs have been used in children and family services, where employees provide care and support to vulnerable young people and residents”.

James Magog, chief accountant of Sunderland City Council, which signed 635 NDAs that paid out £20m, said a “significant number” of the agreements were part of a “workforce planning programme” that “avoided compulsory redundancies” and was “supported by the trade unions”. The standard confidentiality clause used by Sunderland keeps “strictly confidential” the terms of the agreement itself.

But the blanket use of NDAs by authorities such as Stoke-on-Trent or Sunderland contrasts with the 113 local councils that have never signed an NDA since 2014.

Some authorities, such as King’s Lynn and West Norfolk, say they do not use NDAs.

Even if local authorities insist their NDAs do not stop parties from reporting illegal conduct, and that their use is standard in employment and redundancy agreements, the findings raise concerns that people have been improperly and unnecessarily silenced.

The health secretary Matt Hancock, right, has pledged to end the use of gagging orders

The findings also call into question whether hundreds of millions of pounds of public money has been spent in a way that potentially obstructs the public interest on issues that relate to inefficiency, wrongdoing and safety. MPs and lawyers have also heard from women who feel unable to talk about experiences of sexual harassment.

There are debilitating examples from the NHS.

Baby P – Peter Connelly – was a 17-month-old English boy who died in London in 2007 after suffering injuries that included broken ribs and head lacerations over an eight-month period during which he was seen by NHS professionals. Two days before he died, an inexperienced locum saw Peter at the paediatric clinic of St Ann’s Hospital in North London where paediatrician Dr Kim Holt worked.

“We raised concerns for years before Baby P happened – incident reports, loss of posts, department losing staff, while raising concerns, and ultimately there weren’t enough doctors when Baby P was seen,” Dr Holt says.

Stressed out by under-staffing and poor record-keeping, issues that she raised with the clinic’s management, Dr Holt had taken leave for a month at the time. She said that in November 2007, management offered her severance of £80,000, on the condition that she kept quiet about the issues she had raised.

Dr Holt said the hospital’s management approached her again in December 2007 with another offer: £120,000 to not return to work and to stay silent about issues she had raised at the clinic before Peter’s death in August of that year. She refused: “I was offered loads of money, but you have to compromise your ethics – it’s one step too far.”

Dr Holt said she felt that signing a “gagging clause would have massive implications for patient safety and care”.

Peter Connelly – Baby P – was seen by NHS doctors and nurses 35 times before his death

“Gagging orders shouldn’t be happening at all in the NHS,” she says, “but I know they are.”

A spokesperson for Great Ormond Street Hospital, which managed St Ann’s at the time, said Dr Holt’s case is “a historical matter which was dealt with at the time and has been in the public domain for a number of years. There is clear national guidance NHS staff can follow if they want to raise any concerns or speak out on issues that worry them. GOSH is fully supportive of this guidance”.

NHS England, the UK’s largest employer has agreed 1,072 NDAs for departures of staff that were not compulsory redundancies at a cost of £49.6m since 2014. NHS Scotland has a much smaller workforce but nevertheless signed a comparatively low 71 NDAs at a cost of £1.1m.

Six years ago, Jeremy Hunt, who was health secretary, said NDAs could no longer be used after concerns about the case of Sue Allison, an experienced NHS breast radiographer and whistleblower who was gagged from talking about concerns over cancer diagnosis.

Allison, who first blew the whistle in 2012, says she was “bullied” and eventually “worn down” into signing an NDA. “I had no legal representation,” she says, describing the NDA as “unlawful”.

Under the Public Interest Disclosure Act, an NDA is invalid if one of the parties had no legal advice in relation to the agreement.

NHS whistleblower Sue Allison, centre, was forced to sign an NDA by her employers

Allison took her case to the Employment Tribunal in 2018, which determined that her agreement was invalid.

“Gagging clauses and settlement agreements that infringe on an individual’s right to speak out for the benefit of patients are completely inappropriate,” a Health and Social Care Department spokesperson said, adding that the department is trying to create a “more open culture in the NHS”.

Jess Phillips MP, who sits on the UK parliament’s women and equalities committee, said that ever since its 28 March 2018 hearing on the use of NDAs in sexual harassment cases, her “email inbox has been full of people constrained by NDAs” in cases of “sexual harassment, violence” but also “whistleblowers in fraud, accounting”.

Barrister Jen Robinson, in written evidence submitted to the committee, concluded there “is no doubt but that the misuse of NDAs is a serious social evil”. Since submitting that evidence, Robinson says that she has “been approached by a number of different women from a range of different sectors about their experience of sexual harassment and being asked to sign NDAs”.

The committee launched an inquiry into the wider use of NDA in discrimination cases in November. Phillips says that in this inquiry the “committee will go even further”.

The problem is equally serious in the private sector. “Widespread and totally destructive” is how Steve Kohn, a lawyer and founder of the National Whistleblower Center in Washington DC, described the use of NDAs in the private sector in both the US and UK.

The Employment Tribunal, where claims of unfair termination related to public interest disclosures, harassment and discrimination, offers a limited window on to the private sector.

Phillips estimates that only a “fifth of cases ever make it to an employment tribunal”.

Most cases are settled outside the tribunal in exchange for an NDA. Even when they do make it to a tribunal, employers usually settle to avoid adverse publicity as tribunal decisions are made public.

The tribunal lists about 1,700 decisions between January 2017 and January 2019 for cases that included a public disclosure claim. Over half of those cases were withdrawn as a result of settlement.

Barclays Bank and its affiliates settled 11 public interest disclosure claims. Tesco settled eight. When we approached Barclays and Tesco for comment they did not respond.

Following revelations that Sir Philip Green, the retail billionaire, used NDAs to silence staff who accused him of sexual harassment, racism and bullying, the government, in March 2019, outlined legal proposals to ban NDAs that keep employees from reporting potentially unlawful behaviour to the police.

Sir Philip Green at London Fashion Week in 2015

However, the Government’s proposals only cover complaints that can lead to a criminal prosecution and not instances where people are gagged over wrongdoing that might not be illegal, like casual sexism and racism that does not always amount to a criminal offence.

Experts welcomed the move but said that the proposed legal changes were not enough.

Pepper-Parsons says that what needs to be addressed are “the structural issues, like people’s understanding of their rights under the Public Interest Disclosure Act”. This allows people to make protected disclosures to specific supervisory bodies, even if they are under an NDA.

Reacting to the government’s consultation, Rebecca Hilsenrath, chief executive at the Equality and Human Rights Commission, said that “regulating NDAs alone will not prevent workplace sexual harassment” and that what is needed is to “fundamentally change workplace cultures”.

All photographs Getty Images

Further reading