A new legislative bill, Bill M 215 (the Bill), which aims to regulate the use and content of non-disclosure agreements (NDAs) in relation to discrimination and harassment, was introduced in the British Columbia (BC) Legislative Assembly on March 9, 2023.[1] So far, the Bill has only passed through the first reading. If the Bill becomes law, which is anticipated, the Non-Disclosure Agreements Act may affect the way employers in British Columbia deal with discrimination and harassment complaints, including the investigation of such complaints.
As demonstrated by its title, the new BC legislation targets NDAs, which are a type of contract obliging parties to not share certain information with anyone. NDAs are used in different contexts and often protect legitimate business interests or trade secrets. However, their role in discrimination and harassment complaints has become controversial: those campaigning to protect the rights of victims of discrimination and harassment argue that NDAs are frequently used to hide wrongdoings or to prevent people from filing complaints.[2] They argue attempts to silence complainants of sexual harassment through NDAs can negatively impact individuals, the administration of justice and public safety.[3] As perpetrators protected by NDAs manage to move from one workplace to another, details of alleged conduct are shielded from disclosure, often including the fact that a complaint was made. On the other hand, proponents of NDAs argue an NDA can allow a settlement to occur where otherwise no settlement could be achieved (for example, because the alleged conduct is disputed), and it allows both parties to move on with their lives. However, as illustrated in recent matters involving Hockey Canada,[4] the use of NDAs may be damaging to an organization’s reputation if improperly managed.
Although the Bill does not ban NDAs in their entirety, it does require the parties to use plain language which is “clear and understandable” to the person who alleges discrimination and harassment.[5] The Bill requires respondents in harassment complaints to ensure a complainant enters a NDA voluntarily, with the benefit of independent legal advice, and that the NDA is of a set and limited time duration.[6] The Bill also voids NDAs that prohibits disclosure of any relevant information required to be provided pursuant to the Employment Standards Act, the Human Rights Code, the Workers Compensation Act, or to lawyers, among other listed individuals.[7] Importantly, the Bill imposes monetary penalties on parties who violate the proposed legislation by requiring a person to enter an NDA, by way of imposing fines ranging from CA$2,000 to CA$10,000 for individuals and up to CA$50,000 in fines for organizations.
Key takeaways for BC employers
Employers conducting harassment and discrimination investigations should be mindful of the potential impact of the Bill if it is passed. While confidentiality is inherently necessary to ensure the integrity of the investigation, any documents that complainants or witnesses may be asked to sign in connection with the investigation should be carefully prepared to ensure they do not contravene this new legislation. Additionally, any settlements arising from an investigation will need to be carefully constructed, as any rights waived under the NDA could render the NDA void.[8] Legal counsel should be consulted to ensure any settlement agreements do not contain language which is not permitted under the Bill.
Please contact a member of our Vancouver Employment and Labour group if your organization would like to discuss how this Bill could affect investigations in your workplace.
The authors, Jeff Bastien and Sylvia Nicholles, would like to thank Olga Shaporenko for her assistance with this article.
[1] See Bill M 215, Non-Disclosure Agreements Act, 4th Sess, 42nd Parl, 2023, (first reading 9 March 2023) [Bill M 215].
[2] “New Bill Could Ban Misuse of NDAs in British Columbia” (8 March 2023), online: Can’t Buy My Silence https://www.cantbuymysilence.com/media/files/1678325969new-bc-bill-could-ban-misuse-of-ndas-in-bc.pdf
[3] Jennifer Khor et al., “Challenging Non-Disclosure Agreements and the Harm they Cause” (November 2022), online: Continuing Legal Education Society of BC https://online.cle.bc.ca/CoursesOnDemand/PdfFile?contentId=38540
[4] Hockey Canada scandal shows the need to ban non-disclosure agreements, advocates say https://www.cbc.ca/news/politics/growing-calls-outlaw-non-disclosure-agreements-canada-1.6546531
[5] Bill M 215, supra note 1, s 3.
[6] Bill M 215, supra note 1, s 2.
[7] Bill M 215, supra note 1, s 4(a). Section 4(b)(ii). Section 4(b) also includes medical practitioners, a person with duties of enforcement including powers to investigate, registered psychologists, social workers, counsellors, victim service workers, elders, an officer of the Legislature, listed friends and family, and members of a prescribed class of persons. Section 4(c) allows for artistic expression if it does not identify respondents or the terms of the NDA.
[8] Bill M 215, supra note 1, s. 6 reads: “This Act applies despite an agreement to the contrary, and any waiver or release of the rights, benefits or protection provided by this Act is void.”
