Presidents Club Scandal Prompts Calls For Change Over Use Of Gagging Orders On ‘Vulnerable’ Workers

Lawyers have condemned the reported use of non-disclosure agreements (NDAs) on young women working at a men-only event where it was alleged sexual harassment was rampant.

An explosive Financial Times report of the Presidents Club Charity Dinner, self-billed as “the most un-PC event of the year”, revealed how “tall, thin and pretty” women were recruited as hostesses to serve big names in business.

Undercover reporter Madison Marriage detailed how the women were groped, subjected to lewd comments and invited to the attendee’s bedrooms.

According to the FT, hostesses were asked to sign a five-page NDA about the event and they were not given an opportunity to read its contents or take a copy with them after signing. 

But legal professionals told HuffPost it was “astonishing” and “incredibly unusual” that women had to sign a five-page NDA without time to review it, and questioned whether the gagging orders could be enforceable.

<strong>The event was at The Dorchester Hotel, which said it was 'appalled' at what allegedly happened during it</strong>

Theresa May is reportedly considering clamping down on NDAs, with a senior government source telling The Times that the Prime Minister would review the evidence on how they were used and consider the case for reform.

Kiran Daurka, a partner at law firm Leigh Day, who specialises in employment and discrimination, told HuffPost that the NDAs appeared to be “an act of intimidation” and a “form of power against women who are vulnerable”. 

“It’s potentially abusive [if] it’s preventing women from raising concerns, if they feel they have signed away their right to raise those concerns.”

Daurka said NDAs were typically used to stop temporary staff revealing confidential information to competitors or as part of settlement agreements. 

If the NDA was trying to prevent anyone from bringing any claim that they might have, it would’ve been entirely unenforceable but that’s not something people would’ve known when they were being asked to sign it.Amanda Jones, employment lawyer

She added it was “incredibly unusual” for agency staff to sign an NDA on arrival at an event, without being allowed to read or keep a copy of it.

“I have never heard of this and, given how controversial the event was, I think it’s something that has to be urgently reviewed. I’d question whether [the NDA is] enforceable,” Daurka said.

Hannah Reed, senior employment rights officer at the TUC, said: “Employers may try to use such agreements as a way of intimidating staff or giving them the sense that they cannot report anything that can happen at such an event. 

“That it is quite alarming that companies are thinking of using such agreements at the outset.

“It suggests… they expect that there might be inappropriate conduct or behaviour going on at these types of events and they are trying to protect their company reputation rather than thinking about the wellbeing and dignity of their staff.”

Amanda Jones, an employment partner at Dentons, said employers “can’t contract out of employment rights.” 

“If what the NDA was trying to do was to prevent anyone from bringing any claim that they might have, it would’ve been entirely unenforceable but that’s not something people would’ve known when they were being asked to sign it.”

Maria Miller, who chairs the women and equalities select committee, told The Guardian earlier this month that “hard questions” needed to be asked about the widespread use of non-disclosure agreements (NDAs) in workplace sexual harassment cases.

“We have to turn the worm on this. Non-disclosure agreements have become incredibly prevalent in many employment situations in a way they were never designed to, with very few rules in place,” Miller said.

Beverley Sunderland, managing director at Crossland Employment Solicitors,  said NDAs prohibiting discussion of who attended an event or did what could be lawful but added: “The only way that a worker can give up their rights to bring statutory claims such as sexual harassment is by signing a settlement agreement, after receiving legal advice.”

Daurka and Jones said the agency that hired the women had potentially exposed itself to legal action by the women, if it knew about what would happen at the event. 

HuffPost contacted Artista, the agency that hired the women for the event, for comment but received no response as this story went live.

Daurka and feminist campaigners the Fawcett Society told HuffPost, the Presidents Club event showed the law had to be tightened on whether people could take legal action against an employer for harassment they suffer from third parties.

Section 40 of the Equality Act made employers liable for this but it was repealed in 2013.

<strong>Female staff were instructed to wear skimpy black outfits and matching underwear,&nbsp;according to the Financial Times</strong>

Daurka called the repeal “ridiculous”, adding: “Given what’s alleged to have happened [at the Presidents Club event], that’s exactly the kind of protection you would hope would be in place for them.”

The Fawcett Society called for Section 40 to be reinstated on Tuesday – the day before the FT report was published.

Its chief executive Sam Smethers told HuffPost: “Since the law was changed in 2013, employers can no longer be held accountable for third harassment by clients, customers and contractors.

“That has to change. All women should be safe at work and employers can’t simply turn a blind eye.”

Sunderland said the repeal left “gap in the legislation”.

She added: “There may be liability for negligence if [harassment] causes mental or physical harm and the employer/agency reasonably knew about it… 

“The fact is that agency workers and temporary staff are often the least likely to complain because they need the job.”

By Thursday morning, more than 50,000 people had signed a petition calling for the reinstatement of Section 40 of the Equality Act, which made employers liable for an employee being harassed by a third party.

The Presidents Club has announced it is to shut down while Great Ormond Street Hospital says it will return donations raised from the event.