York council spends £1 million on gagging orders for staff

City of York Council has issued 68 “workplace gagging clauses” in the past five years – at a cost of nearly £1 million.

Businesses use legal contracts called non-disclosure agreements (NDAs) to protect commercially-sensitive information.

But in some cases, the government says they can be used to silence and intimidate victims of workplace abuse and new laws will be rolled out as part of a crackdown on the misuse of NDAs.

A council spokesman said they take legal advice in all cases and are working to reduce the use of NDAs. There is no suggestion that the authority has misused the agreements.

A Freedom of Information Request to the council revealed that all of the NDAs it has issued were signed by staff leaving the local authority – and the majority of them were for people working in schools.

The council has spent £955,364 on NDAs in that time, including legal costs and financial settlements.

Government should reconsider

Claire Horsfield, from York-based Bridge Employment Law, argues that NDAs have a legitimate purpose to protect private business interests.

But the government should consider if there needs to be different guidelines for public bodies. She said:

• In a public body, there are a lot of rules that don’t apply to commercial businesses. The government should consider if there should be different rules for public bodies.

  There are a number of reasons why NDAs are used. Some have very legitimate reasons – to protect business interests at a time when information is king and reputation is everything.

  They may also be used when businesses work with self-employed contractors who are not employees.

  It would be interesting to know if these agreements were signed by subcontractors or employees, as that would give a bit of context.
  

She said NDAs cannot technically be used to prevent whistleblowing, but that the law is complex and people should always seek legal advice.

Reduced use

Trudy Forster, head of human resources at the council, said the authority reviewed its use of NDAs in March and there should be a “presumption against NDAs unless a business case is presented that is viable and is then approved by members”.

And the committee agreed that a system should be introduced to examine any financial settlement deals and legal contracts to make sure taxpayers’ money is spent in a “prudent and accountable” way.

She added: “City of York Council are aware of the recent government concerns raised, regarding the use of NDAs and ensure that both HR and legal advice is sought in all such situations.

“The council’s breakdown in the use of settlement agreements, inclusive of NDAs, year on year shows a reduction in their use over the past five years, which is the case in other authorities.”