On February 9, 2023, the Canadian Bar Association swiftly passed a resolution by a margin of 94% with little debate at its annual general meeting calling for a ban on the use of Non-Disclosure Agreements (NDAs) to help victims of workplace harassment, abuse and discrimination to speak up about their experiences and find justice under the law.
Moreover, the resolution pushes to no longer use NDAs as a tool to silence those who come forward after experiencing abuse, harassment and discrimination, especially in the workplace context. The resolution came in part from a campaign founded by Julie Macfarlane, a professor emerita in the law department at the University of Windsor and co-founder of the Can’t Buy My Silence campaign, and Zelda Perkins. Perkins signed and later broke an NDA with disgraced former film producer and convicted sex offender Harvey Weinstein.
What is an NDA?
NDAs have become a default in settlement agreements for the last decade. NDAs are legal contracts in which people agree to keep the information outlined in the agreement strictly confidential. According to Macfarlane and Perkins, the contracts, typically signed by two people, were initially used to protect trade secrets in the workplace but have evolved into a common tool to silence victims and protect perpetrators.
What is the effect of the resolution?
While the resolution from the CBA is not law, Macfarlane says, it removes an obstacle from the government and the opposition of the legal profession and sends a strong message. With the resolution, the Canadian Bar Association committed to discouraging the use of NDAs to silence victims and whistleblowers who come forward to report abuse, harassment and discrimination.
The association also hopes the resolution will inspire companies to review HR practices and policies around NDAs within their organizations.
The association will also advocate and lobby for legislation and policies relating to NDAs at the federal, provincial and territorial levels.
Prince Edward Island became the first province to limit the use of NDAs by regulating the content and use of nondisclosure agreements. Similar legislation is being introduced in other jurisdictions.
The Prince Edward Island Non-disclosure Agreements Act (introduced as Bill 118) came into force on May 17, 2022. The purpose of this legislation is to support and protect Islanders who have been subject to harassment or discrimination from being silenced through non-disclosure agreements. Under the Non-Disclosure Agreements Act, any party responsible or person who committed or is alleged to have committed harassment or discrimination who enters into a non-disclosure agreement that has the purpose or effect of concealing the details relating to a complaint of harassment or discrimination will be guilty of an offence and be liable for a fine of not less than $2,000 and not more than $10,000. This legislation has important consequences for employers who may seek to conceal information related to allegations or proof of instances of harassment or discrimination. The Non-Disclosure Agreements Act imposes strict limitations approaching an all-out ban on such agreements.
The only instance in which a non-disclosure agreement related to allegations or the commission of harassment or discrimination as described above may be enforceable is in the event that such an agreement is the expressed wish and preference of the relevant person concerned. In other words, a non-disclosure agreement related to discrimination or harassment is only valid if such an agreement is the expressed wish and preference of the alleged or actual victim of discrimination or harassment.
The Prince Edward Island Non-Disclosure Agreements Act furthermore prohibits employers from entering into non-disclosure agreements with the person who committed or is alleged to have committed the harassment or discrimination for the purpose of preventing a lawful investigation into a complaint of harassment or discrimination.
Regardless of the above restrictions, the Non-Disclosure Agreements Act does not prohibit the inclusion or enforcement of a provision in a settlement agreement that precludes the disclosure of the amount paid in settlement of a claim.
We will keep you up to date on any other effects the CBA resolution will have on the topic and use of NDAs across Canada.
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