Non-Disclosure Agreements Act

Lynne Lund, MLA Summerside-Wilmot
Official Opposition Critic for Justice and Public Safety

Non-disclosure agreements (or “NDAs”) are contracts that prevent parties from sharing any information covered by the agreement. Non-disclosure agreements are not inherently bad. They can serve useful and legitimate purposes. For example, an employer might require employees to sign an NDA to prevent the disclosure of intellectual property or trade secrets. An employer might require an employee to sign an NDA if they manage personal information through their job. Or, two businesses considering a merger or acquisition might enter into an NDA to promote open dialogue between them and prevent the release of sensitive financial and strategic information to external parties.

NDAs have been used to silence victims of unlawful acts

However, with the rise of the #MeToo movement, greater public attention has been drawn to the use of NDAs to protect harassers. They have been used to prevent victims from speaking out. The harmful effects of these non-disclosure agreements have been widely discussed in the media, academia, and as part of the broader discussions within the #MeToo movement. [1] [2] [3] [4] [5]

The unethical use of NDAs to silence victims has also drawn the attention of elected officials around the world. There is a need to understand just how widespread these secretive agreements are. We also need to ensure these agreements are not used to protect predators. They must not place other employees at risk of harm in the future.

Notably, the UK Parliament’s Women and Equalities Committee has studied the issue and provided recommendations to its Government. [6] In Australia the Australian Human Rights Commission was tasked with the National Inquiry into Sexual Harassment in Australian Workplaces. It produced an extensive report. [7]

However, in Canada, no jurisdiction has adopted legislation regulating the use of non-disclosure agreements. [8] This is perhaps unsurprising given NDAs have only recently received widespread attention and scrutiny. It is also a complex legal issue.

We need to protect employees by preventing NDAs from being misused

Government intervention is needed to ensure NDAs are not used for purposes that cover up harmful acts and expose others to future harm. To that end, we have prepared legislation that would regulate the use and content of NDAs. This will ensure their use is consistent with the public interest.

Our proposed legislation would:

• prohibit the use of non-disclosure agreements in cases of sexual harassment or discrimination where it is not the preference of the victim;
• establish the permitted and required content of a non-disclosure agreement;
• protect and support victims who, in relation to an incident of sexual harassment or misconduct, make a disclosure to law enforcement authorities, regulated health and care professionals, legal professionals, or close contacts;
• establish a reporting framework to track the use of non-disclosure agreements in the province, while protecting the identities of the parties involved; and
• create penalties for employers who do not comply with the legislation.

Islanders are invited to submit their comments directly by email at officialopposition@assembly.pe.ca or by telephone at (902) 620-3977.

Deadline for submitting feedback is 5 pm on Thursday, September 30, 2021.

Footnotes:

[1] Otte, Emily. “Toxic Secrecy: Non-Disclosure Agreements and #MeToo”. Kansas Law Review.
https://kuscholarworks.ku.edu/bitstream/handle/1808/31571/6.%20Otte_FINAL.pdf?sequence=1&isAllowed=y

[2] Harris, Elizabeth A. “Despite #MeToo Glare, Efforts to Ban Secret Settlements Stop Short”. New York Times. 14 June, 2019. https://www.nytimes.com/2019/06/14/arts/metoo-movement-nda.html

[3] Savigny, Heather. “What does #MeToo tell us about NDAs? (and why I wouldn’t sign one)”. Political Studies Association. 17 July 2020. Available here: https://www.psa.ac.uk/psa/news/what-does-metoo-tell-us-about-ndas-and-why-i-wouldn%E2%80%99t-sign-one

[4] Associated Press. “RBG hopes #MeToo non-disclosure agreements ‘will not be enforced by the courts’”. NBC News. 7 Nov 2018. Available here: https://www.nbcnews.com/politics/supreme-court/rbg-hopes-metoo-non-disclosure-agreements-will-not-be-enforced-n1078076

[5] Farrow, Ronan. “Harvey Weinstein’s Secret Settlements.” New Yorker. 21 Nov 2017. https://www.newyorker.com/news/news-desk/harvey-weinsteins-secret-settlements

[6] House of Commons Women and Equalities Committee. “The use of non-disclosure agreements in discrimination cases”. 5 Jun 2019. Available here: https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/1720/1720.pdf

[7] Jenkins, Kate. “Respect@Work: Sexual Harassment National Inquiry Report (2020)”. Australian Human Rights Commission. 5 Mar. 2020. Available here: https://humanrights.gov.au/our-work/sex-discrimination/publications/respectwork-sexual-harassment-national-inquiry-report-2020

[8] “In the Canadian context, there is little guidance on whether it is appropriate to use an NDA to suppress the disclosure of allegations of sexual harassment and the ethical boundaries for lawyers drafting these agreements.” Gay, Alexander. “#MeToo and restricting the use of non disclosure agreements in Canada”. CBA National Magazine. 28 Mar 2019. Available here:
https://www.nationalmagazine.ca/en-ca/articles/law/opinion/2019/metoo-and-restricting-the-use-of-non-disclosure-ag