'Too often, they are part of settlements that end up hiding harmful behaviour,' says attorney general
Employers in New Brunswick could face new limits on non-disclosure agreements (NDAs) in workplace harassment and discrimination settlements under proposed legislation aimed at preventing confidentiality clauses from concealing misconduct.
The province's Non-disclosure Agreements Act would introduce safeguards to address unequal bargaining power while preserving the ability to enter into confidentiality agreements voluntarily.
“Non-disclosure agreements are being used more and more, and, too often, they are part of settlements that end up hiding harmful behaviour. It is important we put laws in place to protect New Brunswickers from the harm non-disclosure agreements can sometimes cause, especially when one side has more power than the other,” Justice Minister and Attorney General Robert McKee said.
What could change for workplace settlements?
The legislation would seek to ensure individuals understand their rights before signing NDAs and prevent confidentiality provisions from allowing repeated harassment, abuse or discrimination to go unreported.
Individuals would also retain the ability to discuss their experiences in certain circumstances, including when seeking legal advice, medical care, therapy, counselling or other support.
Rather than banning NDAs outright, the proposal would introduce safeguards around informed consent and disclosures of misconduct.
New Brunswick's earlier consultation paper on NDA reform considered requirements involving independent legal advice, limits on confidentiality periods and protections against undue influence, although these are not necessarily provisions of the proposed law.
Employers face growing scrutiny over NDAs
New Brunswick's proposal follows Prince Edward Island, which became the first Canadian province to restrict NDAs involving harassment and discrimination.
Under PEI's Non-disclosure Agreements Act, confidentiality agreements involving covered misconduct allegations are generally permitted only when requested by the person who experienced or alleged the misconduct, subject to statutory safeguards.
The issue has also attracted attention in Canadian workplaces. Earlier this year, the Vancouver Symphony Orchestra pledged to largely stop using NDAs in sexual misconduct cases unless requested by the complainant.
Employment lawyers have previously told Canadian HR Reporter that employers should exercise caution when drafting NDAs, particularly when agreements could restrict access to professional advice or support.
Canadian courts have also examined the limits of confidentiality provisions. In one case, an Ontario worker was ordered to repay a settlement after breaching confidentiality and non-disparagement clauses through a social media post. In another, an Ontario court permitted the examination of a former HR executive despite an NDA in a wrongful dismissal lawsuit involving workplace harassment allegations.
