Staying on the right side of the #MeToo line

The #MeToo movement has shone a light on sexual misconduct and harassment which has been around for a long time but is only now being increasingly addressed. To date the main focus has been on the alleged perpetrators and the employing companies. However, this is now being widened to lawyers who advised these parties. While historically the Solicitors Regulation Authority did not take much note of cases involving sexual misconduct, this has changed in the wake of the Harvey Weinstein case, and the SRA is increasingly focused on this. By way of context, the SRA’s current ten mandatory principles for solicitors include: upholding the rule of law and proper administration of justice, acting with integrity, acting independently, behaving in a way which maintains public trust in the lawyer and the provision of legal services and complying with legal and regulatory obligations. Breaches of these conduct obligations require a referral to the SRA who, in turn, may refer the matter to the Solicitors Disciplinary Tribunal. Sanctions include fines and, in serious cases, a striking off. The current SRA Handbook is expected to be replaced this year by the new SRA Standards and Regulations.

SETTLEMENT AGREEMENTS 

Non-disclosure agreements (NDAs) are commonly used in a commercial context, typically in the case of a proposed merger between companies when confidential information is shared between the parties to allow negotiations to progress. Why then is the use of NDAs in the employment context different? Typically the NDA will be included in a so-called settlement agreement. Previously referred to as ‘compromise agreement’, this provides a statutory mechanism to settle potential statutory employment law claims between an employer and employee. For this settlement agreement to be valid the employee in question will have to be advised by an independent lawyer. This independent legal advice should provide some protection to the employee, as they will be advised on the agreement and its provisions, including the NDA wording. The difficulty in this context is, however, the inequality of bargaining power; and in cases of sexual misconduct allegations, the employee is likely to be in an even more vulnerable position than on a usual exit and the reputational pressure on both parties will be greater. In many cases an agreed NDA, if properly approached and addressed, can be in both parties’ interest. Particularly where the employer has taken action against an alleged perpetrator of sexual misconduct and addressed the underlying issues giving rise to any sexual harassment or misconduct and the employee simply wishes to move on and draw a line under the issue, this can be an appropriate approach. The difficulty arises when the underlying issue is not addressed. The reason NDAs are now in sharp focus is that these agreements, in some cases, have included wording to prevent sexual misconduct from being reported to the police and the appropriate authorities. The employee in question is in effect silenced with a threat of sanctions if the NDA is breached. The perpetrator is left to continue acting with impunity for years, with many further victims, as was the case with Harvey Weinstein. The Allen & Overy partner who advised on this particular NDA in 1998 in relation to Harvey Weinstein’s conduct has been investigated by the SRA for the last year and has now been referred to the Solicitors Disciplinary Tribunal.

APPROPRIATE USE

The SRA issued a warning notice on the use of NDAs in March 2018. This set out that while NDAs may be used appropriately, they should not prevent the subject of the NDA from going to the SRA or other regulator or law enforcement agency about conduct which might be otherwise reportable. The SRA was further concerned that there should not be a failure to notify the SRA of misconduct or a serious breach of regulatory requirements, including wrongdoing by the firm. NDAs should also not be used as a means of improperly threatening litigation or other adverse consequences. The Law Society also issued a Practice Note on T he #MeToo movement has shone a light on sexual misconduct and harassment which has been around for a long time but is only now being increasingly addressed. To date the main focus has been on the alleged perpetrators and the employing companies. However, this is now being widened to lawyers who advised these parties. While historically the Solicitors Regulation Authority did not take much note of cases involving sexual misconduct, this has changed in the wake of the Harvey Weinstein case, and the SRA is increasingly focused on this. By way of context, the SRA’s current ten mandatory principles for solicitors include: upholding the rule of law and proper administration of justice, acting with integrity, acting independently, behaving in a way which maintains public trust in the lawyer and the provision of legal services and complying with legal and regulatory obligations. Breaches of these conduct obligations require a referral to the SRA who, in turn, may refer the matter to the Solicitors Disciplinary Tribunal. Sanctions include fines and, in serious cases, a striking off. The current SRA Handbook is expected to be replaced this year by the new SRA Standards and Regulations.

SETTLEMENT AGREEMENTS 

Non-disclosure agreements (NDAs) are commonly used in a commercial context, typically in the case of a proposed merger between companies when confidential information is shared between the parties to allow negotiations to progress. Why then is the use of NDAs in the employment context different? Typically the NDA will be included in a so-called settlement agreement. Previously referred to as ‘compromise agreement’, this provides a statutory mechanism to settle potential statutory employment law claims between an employer and employee. For this settlement agreement to be valid the employee in question will have to be advised by an independent lawyer.

This independent legal advice should provide some protection to the employee, as they will be advised on the agreement and its provisions, including the NDA wording. The difficulty in this context is, however, the inequality of bargaining power; and in cases of sexual misconduct allegations, the employee is likely to be in an even more vulnerable position than on a usual exit and the reputational pressure on both parties will be greater. In many cases an agreed NDA, if properly approached and addressed, can be in both parties’ interest. Particularly where the employer has taken action against an alleged perpetrator of sexual misconduct and addressed the underlying issues giving rise to any sexual harassment or misconduct and the employee simply wishes to move on and draw a line under the issue, this can be an appropriate approach. The difficulty arises when the underlying issue is not addressed.

The reason NDAs are now in sharp focus is that these agreements, in some cases, have included wording to prevent sexual misconduct from being reported to the police and the appropriate authorities. The employee in question is in effect silenced with a threat of sanctions if the NDA is breached. The perpetrator is left to continue acting with impunity for years, with many further victims, as was the case with Harvey Weinstein. The Allen & Overy partner who advised on this particular NDA in 1998 in relation to Harvey Weinstein’s conduct has been investigated by the SRA for the last year and has now been referred to the Solicitors Disciplinary Tribunal. APPROPRIATE USE The SRA issued a warning notice on the use of NDAs in March 2018. This set out that while NDAs may be used appropriately, they should not prevent the subject of the NDA from going to the SRA or other regulator or law enforcement agency about conduct which might be otherwise reportable. The SRA was further concerned that there should not be a failure to notify the SRA of misconduct or a serious breach of regulatory requirements, including wrongdoing by the firm. NDAs should also not be used as a means of improperly threatening litigation or other adverse consequences. The Law Society also issued a Practice Note on