Revealed: CBI uses gag clauses to prevent discussion of sexual misconduct claims | Confederation of British Industry (CBI)

The CBI has used gag clauses to prevent staff from discussing their experiences of sexual misconduct and bullying within the organisation, The Guardian can reveal.

As many as 10 non-disclosure agreements (NDAs) were signed last year following a sexual misconduct scandal in which more than a dozen employees alleged they were victims of sexual harassment, assault and rape. These agreements were accompanied by significant financial settlements with the CBI.

Sources told the Guardian the total bill could be as much as £1 million, including legal fees, settlements and pension deals. The CBI has neither confirmed nor denied these figures.

The use of NDAs has become increasingly controversial after they were used to silence victims of repeat harassers or criminals in a number of high-profile cases of workplace misconduct.

MPs on a Treasury committee investigating sexism in the city recently called for a ban on the use of NDAs in such cases, saying they have the effect of “silencing victims of harassment and forcing them to leave organizations, while protecting perpetrators.”

CBI advisers, as well as current and former employees, said they believed the use of gagging clauses was a serious problem for an organization trying to change its culture. They said this undermined the CBI’s commitment to promoting a so-called “speak up” culture.

Last year, The Guardian’s investigation investigated more than 30 employees who raised concerns about problematic management and cultural issues. Many people said they decided to speak to the Guardian because of concerns about the internal handling of complaints.

Speaking to the Guardian, CBI chief executive Rain Newton-Smith defended the use of NDAs and said she did not believe the contracts would prevent staff from making complaints to police.

“As far as I know, everything we have signed in the last 11 months allows individuals to report problems to the police,” Newton-Smith said.

The Guardian understands that the NDAs relate to allegations from before she rejoined the organization.

The group claims to act on behalf of 170,000 businesses, most of which are made up mainly of other member bodies that are in turn members of the CBI, such as the National Farmers’ Union, which has 46,000 members.

Before the scandal, which led to an exodus of dues-paying members, has been described as the most powerful business lobbying group in the UK.

The CBI sought to rehabilitate itself to regain members and regain access to leading politicians such as Chancellor Jeremy Hunt and Shadow Chancellor Rachel Reeves.

Newton-Smith said more than 30 firms, such as accounting firm PwC, have joined or rejoined since the start of the year.

It said it had put in place a remediation plan based on recommendations from a legal investigation into allegations of misconduct, as well as advice from a business ethics consulting firm.

This includes training for senior management and advice for all staff on raising concerns and new mechanisms, including a specialist app, as well as changes to the composition of senior management teams.

Newton-Smith said the results of a recent employee survey showed that employees were satisfied with body culture and knew how to report concerns about inappropriate conduct.

“We’ve had a really difficult year and I think everyone in this organization has shown tremendous courage over the last year in implementing a huge program of change,” she said.

However, in addition to its reform efforts, the CBI spent hundreds of thousands of pounds to ensure the silence of former employees.

The CBI declined to provide figures on the total cost of the contracts. The precarious financial situation forced the company to lay off a third of its 300 employees last year.

Some of the agreements prevent signatories from sharing their experiences with others who have worked at the CBI, sources said. MPs have warned that such NDAs prevent people from seeing patterns of problematic behaviour.

Newton-Smith, who rejoined CBI last year after working there for eight years, said she had not read all of the NDAs but insisted their use was acceptable, especially in preventing employees from sharing sensitive commercial information.

“I saw some, but not all,” she said. “You know, it’s important that NDAs – I just try not to use that terminology – but any confidentiality clauses don’t prevent individuals from raising further issues of sexual misconduct.” She said the CBI would continue to use NDAs but would keep them under review and reflect “best practice”.

Newton-Smith said the non-disclosure agreements entered into since she took over at the CBI had been of mutual benefit to both individuals and the organization. However, she did not dispute that they prevented open discussion of experiences.

Lawyers told the Guardian that alleged victims of sexual harassment or sexual assault often have to rely on the testimony of others to establish patterns of behavior in the workplace.

This may be impossible if other alleged victims have signed NDAs that prevent them from discussing their experiences with current and former employees of the organization or the media. For this reason, their use has been criticized for having a “deterrent effect” that can prevent repeat offenders from being detected, one lawyer said.

Newton-Smith said NDAs did not stop employees from talking to police, who launched an investigation into CBI-related allegations last year.

In March and April last year, The Guardian spoke to more than 35 current and former CBI employees, alleging that the deceased had a troubled culture that had become toxic.

Several sources said they had raised concerns about culture and complaints of harassment and misconduct herself to Newton-Smith, who – before becoming chief executive – was the body’s most senior female executive.

Despite these conversations, which took place before she became the body’s chairwoman in April, Newton-Smith told BBC Radio 4’s Woman’s Hour in February this year: “I didn’t associate that description of the CBI with a toxic culture.”

The CBI has a long history of using NDAs in bullying and harassment cases, dating back at least a decade.

One former employee who was signed an NDA before Newton-Smith took over said the agreement with the organization prevented them from talking about their experiences with peers – which they believed could have prevented them from harming others.

They told the Guardian they are “appalled” that the body continues to take advantage of such offers.