Should NDAs be banned?

Manitoba politician calls for changes to Bill C-65 amid assault allegations with Hockey Canada

Should NDAs be banned?

Amid the public outcry over Hockey Canada’s handling of sexual assault claims, a Manitoba lawmaker is looking to limit the use of non-disclosure agreements (NDAs) in federally regulated workplaces.

“This is the time to move” because of the public outcry over revelations from the Hockey Canada hearings, non-affiliated senator Marilou McPhedran told the Hill Times.

The legislation would take effect on Parliament Hill and in federally regulated workplaces such as airlines and banks.

On Jan. 1, 2021, Bill C-65, took effect. It outlines the essential elements of a workplace harassment and violence prevention policy, as well as the procedures that must be in place to respond to incidents of harassment and violence if they do occur.

While it was “a remarkable initiative” intended to “create the most protective set of changes possible,” the new law just wasn’t clear and specific enough when it comes to NDAs, says McPhedran.

Recently, Hockey Canada dropped an NDA with the complainant of a high-profile alleged group sexual assault in 2018 involving eight hockey players, including some members of the world junior team, CBC News reports.

The NDA was officially withdrawn the day before Hockey Canada's executives testified before a parliamentary committee on July 27 that is looking into the organization's handling of the alleged sexual assault case, says the CBC.

No changes planned

However, the government is not planning to make changes to the federal workplace protections under Bill C-65, says a spokesperson for Labour Minister Seamus O’Regan in the Hill Times report.

“While the government continues to engage with stakeholders for feedback and recommendations to improve standards for workers, currently, there are no plans to pursue further changes to the regime,” says Daniel Pollak.

The enhanced worker protections introduced in Bill C-65 must be reviewed within five years, he says, and “it is expected that any additional measures that may be required would be addressed once the review is completed.”

In January, Prince Edward Island became the first jurisdiction in Canada to limit the use of NDAs in cases of discrimination and harassment with the passing of Bill 118. The new law, which took effect in May, states that NDAs are only permitted when it is “the expressed wish and preference of the relevant person concerned,” meaning someone who has experienced or made allegations about harassment or discrimination.

Anti-NDA movement

Outside of Canada, there are also some movements against NDAs.

At the start of the year, California’s SB 331 CH 638 took effect. The legislation prohibits an employer from adding a provision in certain agreements that denies disclosing information about harassment, discrimination or other unlawful conduct in the workplace.

In March, legislators from Washington passed House Bill 1795, dubbed the "Silenced No More Act", which targets NDAs that attempt to silence harassment and discrimination in workplaces.

In July, the Victoria government in Australia announced that it is considering restricting the use of NDAs for workplace sexual harassment cases, among other steps to protect employees in workplaces.

Pros and cons

NDAs have their pros and cons, according to Indeed.

On the positive end, they help prevent employees from leaving the company and sharing confidential information with a competitor in exchange for a higher-paying role.

Also, “by signing an NDA, your employees are unable to release passwords or company and client data. This helps prevent your business from losing clients and revenue due to data leaks,” it says.

However, employees may not fully understand the terms of the agreement.

“Employees may not fully understand the terms [of] the agreement, causing them to accidentally break the terms without realizing it. This can result in the need for legal processes and paying extensive legal fees.”

NDAs can also be time-consuming to write and costly if employers hire a legal professional for them. And because these documents can be lengthy, employees may decide not to read the entire document, which may lead to accidental contract violations, according to Indeed.

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