Zelda Perkins (assistant to Harvey Weinsten) has recently done her first broadcast interview for BBC Newsnight, thereby allegedly breaking her settlement agreement confidentiality clause (in America, where it is called a non-disclosure agreement, NDA) that she signed 19 years ago.
Settlement agreements are useful documents given to departing employees, typically to prevent an employee bringing claims against their employer, not to speak ill of their employer (non-derogation) and not reveal any confidential information in exchange for money.
She received £125,000 for signing the NDA. Zelda says that she was given the NDA to silence her from telling anybody about an incident that left a colleague accusing movie mogul Mr Weinstein of trying to rape her, an allegation that he denies.
Ms Perkins has told the BBC “The last 19 years have been distressing, where I’ve not been allowed to speak, where I’ve not been allowed to be myself…It’s not just distressing for me, but for lots of women who have not been able to own their past, and for many of them, their trauma. Although the process I went through was legal, it was immoral.’
This story has brought to light an intriguing question: Are UK settlement agreement confidentiality clauses enforceable?
There is not a straightforward answer to this, as a settlement agreement confidentiality clause could be invalid on the basis of public policy because it is a ‘contract damaging to morality’ or a ‘contract that interferes with the machinery of justice’. This is because there is a distinct possibility that such a settlement agreement could be used to cover up sexual crime.
Geoffrey Robertson QC has said ‘There is, however, an entirely legitimate case for the UK Parliament to pass an amendment to the Criminal Justice Act, making it a crime to offer money to employees to silence them in relation to criminal offences that they know about’.
It is unlikely that Parliament intended settlement agreements to be used in a way which could cover up criminal acts or prevent whistleblowing.
In summary, the Harvey Weinstein saga appears to have raised an important legal question as to whether there should be an exception to settlement agreements being used to cover up wrongdoing. The question now is whether Parliament will do as Geoffrey Robertson has suggested, in making it illegal to compensate employees so they are silent about criminal offences that they know about.
By Zahid Reza
Image used under CC courtesy of David Shankbone