OPINION: Deep in the latest excellent reporting from journalist Paula Penfold on sexual harassment revelations at accounting firm EY (Ernst & Young), there was a quote from the company’s chief executive Simon O’Connor, that made me stop short.
‘”We’re no longer using NDAs.”
EY will waive the non-disclosure agreements if anyone requests it to do so; O’Connor commits to EY not taking action against anyone who has breached their NDA by talking to Stuff. He told Penfold staff could come directly to him to get released from their confidentiality contracts.
“Blimmin’ heck,” I thought. Releasing people from NDAs? In all my years of investigating sexual harassment in New Zealand workplaces, I’ve never seen that before.
EY, one of the “big four” professional services firms, has been mired in claims of toxic work conditions and sexual harassment for months. Its New Zealand, chair Braden Dickson left in February for behaviour that “did not meet our code of conduct”, but O’Connor would not explain what that behaviour was.
In 2022, the company commissioned an independent review of its workplace culture. That review concluded that, despite EY having a range of equity and diversity principles, bullying, sexual harassment, and racism continue to exist and cause significant harm to staff.
A number of staff have come forward to Penfold claiming “horrific” behaviour has gone unchecked at the firm. Even the publicly released results of a huge workplace culture report failed to make a difference, they told her. And many of them, Penfold reported, are subject to NDAs.
The price of silence
NDAs, or confidentiality agreements, have become common in the business world in recent decades, but it wasn’t always that way. In the modern business environment, their use began to protect trade secrets in the booming Silicon Valley tech industry of the 1980s. At the start, they were not designed to gag people who raised misconduct issues in the workplace.
Now, they regularly commit traumatised survivors of workplace harm to never speak of it again, in some cases, not even to their families, friends, a therapist or a lawyer. Often, those people sign the agreements under pressure, while at the same time trying to cope with the crumbling of their careers (most often, it’s the complainant who ends up leaving their job) and mental health.
Research in Australia (I have not been able to find anything specific to New Zealand) has found many don’t know that signing an NDA is optional and they can reach a settlement without one.
As Zelda Perkins, one of the Harvey Weinstein whistleblowers says, negotiation of an NDA can be more traumatic than the behaviour itself. Never spoken to a lawyer before? You’re likely to sign without question.
“All the guns are pointing to you, the pressure is on you to sign. So you’ll give in in the end, almost everyone does,” she says.
Perkins’ campaign, Can’t Buy My Silence, gives survivors the information they’re often not getting but should be, for example:
Misuse of NDAs protect the perpetrator, who can stay in their job or move to another job without anyone knowing about what they did, allowing the chain of harm to continue. They mean you might not be able to tell anyone, ever, about what happened to you, with consequences for your mental health and healing. They force you to lie about what happened to you in job interviews, to your colleagues and friends.
None of that helps the survivor, when a simple, one-sided confidentiality clause could work for their privacy just as well.
NDAs are now so widespread that governments from California, to the UK, to the Australian state of Victoria are beginning to say, “Enough. Strict confidentiality terms must not be used in sexual harassment cases to silence survivors.”
But this idea of banning NDAs altogether is controversial.
Their advocates say survivors often want confidentiality to protect their privacy, and allow them to move on. Legislation is a blunt tool—surely we could do better with guidelines instead? That would work, if we could assume survivors are properly informed of what they’re signing, who it prevents them talking to and who it does not.
Sadly, we cannot make this assumption.
Why guidelines don’t work
In 2022, Australia’s Respect@Work Council released guidelines advising confidentiality clauses should not be seen as standard terms, their scope should be limited, and carve-outs should be included to allow survivors to talk to their support network including family, friends and doctors.
Media platform The Conversation waited a year or so, then surveyed 145 harassment lawyers. The overwhelming majority – 75% – said (guidelines be damned) they had never resolved a harassment claim without a blanket NDA with no carve-outs. A quarter of them had never read the guidelines and very rarely were survivors advised of their existence.
You’d be forgiven for thinking those survivors were effectively treated like mushrooms, kept in the dark and fed BS.
Which brings us back to EY.
After months of asking, O’Connor sat down with Penfold for an interview. My first reading of his comments made me think, “Well, good on him.” But before that, he’d sent a statement about EY’s use of NDAs which used language that raised some questions.
“[L]ike many organisations across Aotearoa New Zealand, when an employee negotiates an exit, we have used confidentiality and non-disparagement obligations in the standard template, designed to protect the employee and EY,” he said.
What is the “standard template”, I wondered? Does it include clauses that prevent the staff member from talking to family, friends, therapists, lawyers, or reporting to disciplinary tribunals, the Human Rights Commission or other reporting pathways?
After all, some have said they believed “even confirming the existence of any agreement put those people in breach”, which would suggest the most restrictive of terms available.
And, do staff need to come to O’Connor to ask to be released from their NDAs? Is he aware of the power imbalance? And would he, therefore, agree to a blanket release without having to approach him personally?
I followed up; I asked EY in the hope it would answer those questions. I was truly hopeful we might be approaching a breakthrough in this long-running issue.
I am a mug sometimes.
In uncharted waters
After talking about the EY culture review and how they are addressing the recommendations etc, etc, an EY spokesperson told me this: “In line with many businesses, we have typically included both confidentiality and non-disparagement terms in our deeds/settlement agreements. These are standard terms within such agreements and are typically included for the benefit of both parties. Given the importance we are placing on transparency, we are reconsidering our approach to using such terms in the future.”
“Typically”. “Standard terms”. There are those pesky descriptions again. Why are they standard? And are they “for the benefit of both parties?”
Really? Or have they become a default position that businesses enjoy, and which the survivor is too scared to challenge?
The spokesperson also said EY knew it was “advocating” for an unusual approach in the business world, and every situation needed to be considered on its merits.
“[W]e are in uncharted waters.”
They’re right about that, at least. EY deserves some kudos for taking this first step, albeit under pressure. And for the sake of anyone whose career and mental health has been wrecked by workplace misconduct, I hope there are other employers now “reconsidering” their practices around NDAs.
