On Sept. 21, Justice Minister Brad Johns told reporters that after two years of consideration and two bills brought before the legislature last session, the Houston government will not make changes to ban the use of Non-Disclosure Agreements (NDAs).
NDAs are settlements made outside of court between a person who complains they were a victim of discrimination or sexual harassment or assault by a perpetrator who is willing to pay that person to stay silent and take no further action through the courts or the media.
At the time, Johns said he was unprepared to explain to reporters the reasons for his decision other than it was based on “multiple factors.”
“I can follow up with you,” Johns told reporters. “I don’t want to say something and be misquoted.”
The Halifax Examiner took Johns at his word and asked for written reasons why the Houston government will continue to permit the use of non-disclosure agreements. We received this e-mail response through senior communications advisor Deborah Bayer:
Supporting survivors of sexual harassment and discrimination with sensitivity and respect is incredibly important. We agree that non-disclosure agreements should not be used as a means to silence victims.
As Minister Johns said after cabinet, the department conducted significant research, including a jurisdictional scan, and information we received. PEI remains the only jurisdiction in Canada that has enacted broad legislation regulating the use of NDAs in situations of alleged harassment or discrimination.
The Manitoba Law Reform Commission recently considered this issue and recommended against this type of legislation at this time. One of the key reasons for their position is that banning NDAs could greatly reduce the ability to settle matters outside the court. It would otherwise force complainants to forego compensation altogether unless they are willing to pursue their claim in court. You can find that report at http://www.manitobalawreform.ca/pubs/pdf/145-full_report.pdf .
This is a complex issue. In considering the totality of the research, as well as the fact that only one province in Canada has moved forward on this type of legislation, government has opted not to introduce non-disclosure agreement legislation.
Within the past year, both the NDP and Independent MLA Elizabeth Smith-McCrossin had introduced bills that would ban the use of NDAs where the complaint involved sexual harassment or sexual assault.
Other provinces, such as Manitoba referenced by Johns, have been considering broader bans on “misconduct” that include discrimination and sexual harassment.
Johns claims his department considered “the totality of the research” on NDAs but his response to the Examiner makes no mention of what’s happening in several other places. We’ll get to that but first, what does the June 2023 report from the Manitoba Law Reform Commission have to say?
The report’s first recommendation states “legislation that governs the content and use of NDAs in claims of misconduct (‘NDA legislation’) should not be enacted in Manitoba at this time.”
The main reason is that complainants and respondents would be less likely to settle disputes before going to court and “the probable consequence of banning NDAs would be to force complainants to choose between being subjected to trials and adjudicated hearings, or else forego compensation altogether.”
The Commission said getting rid of these agreements could have “unintended negative consequences for victims” and quotes from a presentation given by a woman author, lawyer, and survivor of childhood sexual abuse in support of that position:
Given my past, I tend to focus first on the victim, on what’s best for the victim. That focus is so absolute that the only possible submission I could make here is that NDAs in these circumstances must be eliminated, right?
Because even though I live daily with my experience as a victim of the worst serial sexual abuse imaginable, I can’t shut down the other part of me that knows that I benefitted from an arrangement that involved an NDA that may not have been possible had there been a law preventing an NDA in my circumstances.
In short, there is no right answer, for as strong as all of the reasons why NDAs can be harmful and dangerous for victims are, things just might end up even worse for victims if NDAs are not allowed in these circumstances.
My submission would undoubtedly be different if we lived in a world where as much money and other resources is dedicated to rehabilitating victims as is made available for incarcerating and attempting to rehabilitate those who commit the crimes against these victims. But we don’t live in that world. Things are getting better, but we still don’t focus enough on making sure victims are rehabilitated. That can leave a victim desperate for whatever help and support he or she can get, financial or otherwise.
Unfortunately, NDAs are one side of a commercial transaction. It’s ugly to think of them that way, but that’s what is most often taking place. Silence is being traded for money. It’s awful, it’s disgusting. But it’s the reality. And, it’s an undeniable fact that without an NDA and the corresponding secrecy parties would have less incentive to enter into agreements with victims. As bad as being constrained by an NDA might be, it isn’t for me to ever say that a victim would be better off being free from that burden if it meant having to give up a financial settlement that could possibly provide life-sustaining support. The unfortunate reality is that there would be fewer settlements available for victims if NDAs were not permitted in these instances.
I know what I want to write. I know what people want to hear from a victim like me. I want to be able to write that NDAs in these circumstances are reprehensible and should be precluded. And they are reprehensible. But just because they are reprehensible doesn’t mean that the alternative wouldn’t be worse. Eliminating NDAs would skew incentives in a way that would likely have an even worse impact on victims. And, I don’t think there is any meaningful way to legislate a way out of this basic conundrum…
NDAs seem bad, they feel bad, so they must be bad, we must enact a new law precluding them or limiting them. But NDAs can facilitate what a victim needs. NDAs, as abhorrent as they may be, actually develop out of a process that tries to make things better for the victim. So I urge caution before any steps are taken that would potentially interfere with this unpalatable yet important part of our legal system involving victims.
A powerful and disturbing appeal on several levels.
Manitoba’s Law Reform Commission also received eloquent submissions from advocates with the group ‘Can’t Buy My Silence’ and law professors who argue only by banning NDAs can the public be protected from bullies and sexual predators who may continue repeating unlawful behaviour.
The commission quoted from a 2022 report prepared by Ireland’s Department of Children, Equality, Disability, Integration and Youth on the use of NDAs:
NDAs can serve to preserve toxic workplace…NDAs may prevent the identification of people against whom multiple accusations of harassment, abuse or discrimination have been made, thereby enabling them to continue to operate largely undetected. By allowing respondents to avoid taking responsibility for their actions, and sometimes, to continue working for other institutions in the same capacity, these NDAs may not only create a “culture of impunity,” but may actually place other people in danger of falling victim to a perpetrator.
Both the Irish parliament and the British parliament currently have bills before them calling for restrictions on the use of NDAs.
The report from the Manitoba Law Reform Commission also acknowledges that the secrecy and privacy provisions provided by NDAs can be a double-edged sword. Proponents praise them for allowing victims and perpetrators to “move on” and avoid public shaming. But the commission also heard from people who reported NDAs can have negative emotional consequences for complainants:
These may include feelings of anxiety and fear of being subject to legal action if an NDA were to be broken, and additionally, feelings of depression or isolation, which arise from the inability to confide in family, friends, acquaintances, and even in some cases, mental health professionals, about the traumatic experiences which underlie an agreement.
Readers of the Examiner will recall the story of Kaitlin Saxton, a young Nova Scotian woman whose parents confirmed she suffered emotionally after signing an NDA with an unnamed person.
Saxton had been employed by the Progressive Conservative party as a researcher and communications worker from 2011 until 2018, when she abruptly resigned.
Saxton’s departure coincided with the release of a report from an independent third-party into an allegation of misbehaviour by then PC leader Jamie Baillie. Baillie resigned in January 2018.
Smith-McCrossin later hired Saxton as her constituency assistant; Saxton died of a brain hemorrhage in 2022.
Last spring, during an acrimonious debate in the Nova Scotia Legislature about restricting the use of NDAs in cases of sexual harassment, Smith-McCrossin read the following statement from Saxtons parents:
Kait was coerced into signing [a non-disclosure agreement]. That is a fact. But what was worse for her was the total abandonment she endured from her ‘friends’ in the caucus office… Kait was ghosted and had no other choice but to come home and heal … Her career she dearly loved was over, and she was treated like a pariah.
The current PC government issued firm denials that neither the PC party nor anyone within the current PC caucus ever signed an NDA with Kaitlin Saxton. Former PC leader Jamie Baillie refused to say whether he did or not. Nova Scotians may never know whether the Houston Tories’ refusal to ban NDAs in cases involving sexual harassment is motivated by its two-year “jurisdictional scan” or by a case of political PTSD over a scandal close to home.
‘Can’t buy my silence’
While Johns correctly notes that only P.E.I. has enacted legislation to ban the use of non-disclosure agreements, there are other governments that have moved to restrict the use of NDAs.
More than a dozen states in the U.S. do not allow the use of NDAs when complaints of sexual harassment and sexual assault arise in the workplace. Some states like New York give complainants a choice while Illinois outlaws the use of NDAs everywhere.
The province of Ontario has made a legislative change that does not permit universities and private and community college to enter into NDAs when complaints of sexual harassment or discrimination arise. Such agreements are only allowed at the request of students who can show they have first received legal advice. These agreements are for a fixed duration after which they are no longer secret. The reasoning reflects what is often a power imbalance in a relationship between a student and an instructor where the teacher can draw on support from a professional group and/or the administration.
Complaints of abuse by athletes against coaches or by women against Hockey Canada athletes have encountered similar power imbalances when a sport organization chooses to back one side and pay off another.
There’s also legislative action on NDAs underway in Ottawa. On May 9, 2023, Bill S-261 or the ‘Can’t Buy Silence Act’ was introduced in the Canadian Senate by Senator Marilou McPhedran. If it passes, the bill would amend other legislation to significantly restrict the use of public money to enter into NDAs and go to court against complainants.
The language in McPhedran’s bill goes further than proposed changes in Nova Scotia, which only apply to NDAs concerning sexual harassment and sexual assault. McPhedran’s bill would ban the use of NDAs for any case of discrimination or misconduct covered by the Canadian Human Rights Act.
In general, federal government departments and agencies would be prohibited from using federal money to sign NDAs with two exceptions:
1. The complainant has had the opportunity to obtain independent legal advice that includes advice on alternative means to protect the confidentiality of their personal information; and
2. After receiving said advice, the complainant makes a specific and voluntary written request for an NDA before the agreement is entered into.
Another compelling feature of the McPhedran Bill is that it requires the president of the Treasury Board to make annual reports telling the public just how much money is going out the door to settle complaints of discrimination and sexual harassment in the workplace.
Impact on the court system
One of the arguments the Manitoba Law Reform Commission said it heard from many labour lawyers was that doing away with NDAs could overwhelm a court system already strained to capacity. In its executive summary, the commission warns:
The Commission was advised and cautioned about the potential negative impacts that proposed legislation could have on complainants, respondents, and the legal system in Manitoba at large. These negative impacts could include: an increase in lengthy, public and potentially contentious court hearings, potential contractual uncertainty, a decrease in the significant number of out-of-court settlements, and the exacerbation of access to justice issues.
In other words, if you don’t give people the option to settle privately out of court, the courts will become even more overburdened.
In Nova Scotia, criminal courts are struggling to clear cases within the prescribed 18 months while lawsuits continue for years.
This reasoning, however, is at odds with presentations from other lawyers who told the commission victims of sexual abuse or discrimination rarely have the money to pay for a lengthy court battle against a corporation or an institution. So it appears to be a weak argument.
What’s particularly interesting is that in February 2023, lawyers from across Canada voted in favour of a Canadian Bar Association resolution to “discourage [the] use [of NDAs] to silence victims and whistleblowers who report experiences of abuse, discrimination and harassment in Canada” and to “advocate and lobby the federal, provincial and territorial governments to enact changes to legislation and policies to ensure NDAs are not misused for the purpose of silencing victims and whistleblowers.”
Lawyers who are members of the Canadian Bar Association passed the resolution by a margin of 94%.
This suggests that regardless of what action governments choose to take — or in the case of Nova Scotia choose not to take — there will always be plenty of work for lawyers.
At issue is how best to protect individual people and the public at large from immoral and illegal behaviours that can inflict long-lasting damage.