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NDAs vs. Victims’ Rights: The Legal Debate on Sexual Harassment Cases in India

Writer's picture: Reetika GuptaReetika Gupta

The debate surrounding the use of non-disclosure agreements (NDAs) in sexual harassment cases is intensifying globally, particularly in light of the #MeToo movement and increasing awareness of power imbalances in the workplace. Recent high-profile cases, coupled with growing public scrutiny of corporate practices, have fuelled demands for greater transparency and accountability. This heightened awareness has brought to light how NDAs can be misused to silence victims and protect perpetrators, thus undermining efforts to create safe and equitable workplaces. The use of NDAs to suppress whistleblowing, particularly in cases involving sexual harassment, has further amplified the debate, raising concerns about corporate governance and ethical conduct.


NDAs, often presented as a standard part of employment or settlement agreements, are designed to protect confidential information and a company's reputation. However, their use in harassment cases, and increasingly in broader contexts, raises concerns about limiting free speech and obstructing justice. The US, for example, has enacted the Speak Out Act, allowing victims to disclose their experiences despite existing NDAs and preventing companies from suing them for doing so. Recent cases, like the OpenAI whistleblower complaint to the SEC, highlight how NDAs can be used to potentially silence concerns about corporate wrongdoing, including sexual harassment. One of the ill effects of NDAs in sexual harassment cases is that they create a culture of secrecy, allowing perpetrators to continue their abusive behaviour without fear of exposure. For example, if a victim is silenced by an NDA, the perpetrator remains emboldened, potentially harming other employees. Furthermore, NDAs can prevent victims from seeking the support and resources they need to heal and move forward. They can also shield companies from reputational damage, even when serious allegations of harassment are substantiated.



In India, the legal status of NDAs in such cases is complex. While the Indian Contract Act of 1872 recognises NDAs as valid contracts if they meet certain criteria (free consent, lawful object, and not against public policy), their application in sexual harassment and whistleblowing scenarios is contentious. Although NDAs can legitimately protect sensitive business information, their use to shield perpetrators of harassment or suppress reports of illegal or unethical conduct raises serious ethical and legal questions.


The conflict arises because these NDAs can clash with several fundamental rights and legal provisions. Firstly, they may be deemed void under Section 23 of the Indian Contract Act if they are considered against public policy, such as preventing the reporting of sexual harassment or hindering whistleblowing. Secondly, they can potentially violate the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act), which mandates a formal complaint and redressal process. NDAs that obstruct this process, or any legally mandated reporting mechanism, could be challenged. Thirdly, they may infringe upon fundamental rights enshrined in the Indian Constitution, including the right to freedom of speech and expression (Article 19(1)(a)) and the right to equality (Article 14). If an NDA prevents a victim from sharing their experience, shields the perpetrator from accountability, or prevents an employee from reporting wrongdoing, it could be considered a violation of these rights. The inclusion of non-disparagement clauses in NDAs, particularly those that extend beyond the term of employment, further complicates this issue, potentially chilling free speech.


Indian courts are yet to provide a definitive stance on the enforceability of NDAs in sexual harassment and whistleblowing cases. However, international trends and recent legal developments suggest a growing emphasis on victims' and whistleblowers' rights. Courts are likely to scrutinise factors like whether the NDA was signed under duress, whether it hinders access to legal remedies or reporting channels, and whether it conflicts with fundamental rights or statutory protections. Precedents from other countries, where NDAs in similar cases have been invalidated due to public policy concerns, may influence future decisions in India. Indian courts have generally disfavoured restrictive provisions that extend beyond the term of employment, setting a precedent for challenging over-broad NDAs.


The use of NDAs in harassment and whistleblowing cases is facing increasing criticism from activists, legal experts, and regulators who argue that they enable perpetrators to avoid accountability and suppress crucial information. This has led to calls for legislative reforms to regulate or even prohibit their use in such situations. India may follow the lead of other countries that have already introduced such restrictions. The #MeToo movement highlighted the ineffectiveness of NDAs in preventing the disclosure of widespread harassment and the reputational damage companies can suffer despite them.


Best Practices for Indian Companies: NDAs, Sexual Harassment, and Workplace Safety


To maintain best practices regarding NDAs and sexual harassment, Indian companies should:

  1. Conduct a Thorough NDA Policy Audit and Revision: Don't just review – reimagine your NDAs. Go beyond simply stating that reporting to authorities is allowed. Actively incorporate language that encourages reporting of harassment and clarifies that internal reporting to the ICC or designated HR personnel does not constitute a breach of the NDA. Consider adopting a two-tiered NDA approach: one for general business confidentiality and a separate, more limited NDA specifically for harassment situations, explicitly excluding reporting to regulatory bodies and participation in investigations.


  2. Implement Interactive and Empathetic Training:  Move beyond rote memorisation of policies. Invest in interactive training programs that include real-life scenarios, bystander intervention training, and emphasise empathy and respect. Include training on the limitations of NDAs, explicitly stating that they cannot be used to silence victims of harassment or prevent them from seeking justice. Offer separate training for managers on how to handle disclosures of harassment sensitively and confidentially, emphasising their role in creating a safe reporting environment. Consider incorporating external experts or facilitators to enhance credibility and objectivity.


  3. Develop a Multi-Channel, Confidential Reporting System:  A single reporting avenue is insufficient. Establish multiple, confidential channels for reporting harassment, including:

    1. Dedicated Ethics Hotline:  Operated by an independent third party to ensure anonymity and impartiality.

    2. Online Reporting Platform:  With robust encryption and secure messaging capabilities.

    3. Designated Confidential Advisors:  Trained individuals within the organisation (HR or legal) who provide support and guidance to victims.

    4. Anonymous Reporting Mechanism:  Allowing individuals to raise concerns without fear of identification. Guarantee prompt and impartial investigations by an independent body, not just internal HR.


In conclusion, while NDAs serve legitimate purposes in various contexts, their use in sexual harassment and whistleblowing cases presents significant ethical and legal dilemmas. Victims and whistleblowers should not be coerced into signing agreements that silence them and prevent them from seeking justice or reporting wrongdoing. Indian courts and lawmakers must find a balance between protecting confidentiality and upholding fundamental rights. Increased transparency and accountability in workplace and corporate governance are crucial to ensuring justice for survivors and preventing the misuse of NDAs. NDAs cannot be used to prevent disclosures to law enforcement agencies or courts. Responsible corporations should balance confidentiality needs with employee rights and agency when crafting NDAs and employment agreements. The long-term risk management approach, including transparent communication about potential risks, is crucial for building trust and fostering a healthy corporate environment.



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