Philip Green & should gagging orders be banned?

At the time of writing this blog (2019), there was a huge story about Sir Philip Green all over the media.

Claims of a cover-up were rife, as Green applied gagging orders to a number of people who worked for him, ensuring their silence over allegations of sexual harassment, and racism.

But the gagging orders fell apart, and the question now is whether we should have gagging orders in public life at all?

See our later (2022) article on non-disclosure and confidentiality agreements for a wider-ranging discussion of the topic and the place of such agreements in settlement agreements.

What a gagging order is, how they are organised and what effect do they have?

When you hear about gagging orders it’ll usually be a reference to a confidentiality clause in a settlement agreement document.

A settlement agreement is essentially a contract made between you and your employer if you have been treated badly at work and you wish to leave with a lump sum payment.

For example, if you were harassed by your boss, or, more commonly, if you are being unfairly dismissed. In exchange for a financial payment, you leave quietly and agree to not go to court or bring allegations to the public arena.

 

Why would an employee want to sign a gagging order?

Wouldn’t you have a strong case if you’d been unfairly dismissed or sexually harassed? Why would you not want to go to court? Wouldn’t you get more money? Or does the settlement give you such a substantial amount more of money that it would be enough to purchase your silence?

Generally, you won’t get more money in a settlement than in court, but what you will get is certainty. You’ll get money in the bank and you can move on.

Whereas in court there is always the ‘litigation risk’, the chance that you could lose. Most sexual harassment or racism isn’t done in emails or in writing, therefore, it’s very hard to prove.

The second advantage of settlements is that most people don’t want to be in court and become public figures, bringing their bosses to account. They just want to get another job and move on from the whole thing. Making them go through a 2-year court case is probably the last thing they want to happen to them.

Also, employment law legal aid was cut a long time ago, therefore, how do you fund that court case? How do you afford a lawyer? The whole thing in practice is a bit of a nightmare. It is a difficult reality.

The stigma attached to people who have gone public with allegations of harassment

If you are well-known yourself, or the person you are trying to claim against is well-known, it must attract press attention. Forever after you become the person who was sexually harassed by so and so, but you probably don’t want future employers knowing this and associating you with your past.

You most likely didn’t invite this type of behaviour in the first place, so the last thing you want is the stigma around you for the rest of your life.

What our Alex Monaco proposes in his book, The Resignation Revolution, is the concept that people should want to resign and get paid off. It shouldn’t be seen as wrong to get ‘hush money’.

You have to accept that the past is the past; this has happened; it was bad. Going forward what do you want, a lump sum payment, or to go to court and be in the public eye? The fact is that people would probably not do either of these things if you banned gagging orders: people would get nothing at all.

The effect of the Philip Green story on gagging orders.

It’s brought gagging orders into the spotlight and most importantly, the behaviours that lead to attempts to enforce them in the first place.

It’s admirable that campaigns like #metoo have gone global, and that unscrupulous employers are getting called out for underhand behaviours.

But let’s not throw the baby out with the bath water here and ban gagging orders without a proper incentive or alternative. What is the alternative? How is it going to work? And how will it protect the employees when we get to the idea of settling cases out of court?

What happens if you change your mind later and want to go public?

What if you decide after signing the agreement that you aren’t happy, or that you don’t feel better about the whole situation and want people to know the reality – and so you talk about it?

Do the people who give you the money go after you, or do they think of the reputational damage involved in going after someone and publicising the things that they have done wrong?

Normally the threat of being sued is enough to keep most victims quiet. It’s worth saying that in order to make one of these settlement agreements containing gagging clauses legally binding, you have to take legal advice in the first place.

You can’t just be cornered in a room by your employer and forced to sign one. You have to have your lawyer as a third signatory and be informed of your rights by your lawyer at the time, before you take the money.

Your lawyer’s job is to let you know whether you are getting a good deal in terms of money and if you are getting enough financial compensation for what has happened to you.

You could go public and the perpetrator of those unlawful acts might not come after you. But what we see is people like Philip Green potentially going after people who breach the agreements.

That is a real outcome. So think carefully before agreeing to enter into a settlement agreement that contains gagging clauses and get some good legal advice.