Proposed changes to Non-Disclosure Agreements
Bill 124: Stopping the Misuse of Non-Disclosure Agreements Act, 2023
The proposed legislation aims to regulate the use of non-disclosure agreements relating to discrimination, harassment, sexual harassment, and sexual assault in the workplace.
Limits on NDAs
Bill 124 would prohibit any person who has a legal obligation to take reasonable steps to prevent discrimination, harassment, sexual harassment, or sexual assault from entering into non-disclosure agreements with a person who has experienced or made allegations of such conduct (the "relevant person") if the purpose or effect of the NDA is to conceal the details of the conduct/incident.
Exception
The bill carves out an exception for those who have experienced or made allegations of discrimination, harassment, sexual harassment, or sexual assault, who expressly wish to enter into the agreement. The bill states that entering into the agreement must be the "expressed wish and preference" of person who experienced or made allegations of this conduct.
Requirements to meet exception.
To meet the parameters of the exception:
- The relevant person must have had a "reasonable opportunity" to obtain independent legal advice.
- There must have been no "undue attempts" to influence the relevant person to not disclose material information.
- The agreement must not adversely affect the health and safety of a third party or the public interest.
- The agreement must allow the relevant person to waive their own confidentiality in the future and must outline the process for initiating this waiver.
- The agreement must be for a limited and set period.
This allows those who may wish for their allegations to be kept confidential to engage the exception to protect their confidentiality, while also providing an avenue for them to change their mind in the future should they wish.
The bill further prohibits the person with the obligation to take steps to prevent such conduct from entering into a separate non-disclosure agreement with the perpetrator or alleged perpetrator of the conduct if the purpose is to prevent a lawful investigation into the matter. Meaning employers can't sidestep the intent of the legislation by entering into agreements that aim to conceal the conduct and hinder the investigative process.
Ontario is not the first province to consider this type of legislation, as Prince Edward Island enacted the Non-Disclosure Agreements Act in 2021, while Manitoba's The Non-Disclosure Agreements Act, tabled in 2022, did not move forward.
Key takeaways
On it's face Bill 124 seeks to protect victims of workplace discrimination, harassment, sexual harassment and sexual assault from being silenced by their employers through complicated non-disclosure agreements. If passed, it signals a move towards greater transparency in the workplace when it comes to such allegations.
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