The CBI has used gagging clauses to prevent staff from discussing their experiences of sexual misconduct and bullying at the organisation, the Guardian can reveal.
Up to 10 non-disclosure agreements (NDAs) have been signed in the past year after the lobbying group’s sexual misconduct scandal, in which more than a dozen staff alleged they had been victims of sexual harassment, assault and rape. Those agreements have been accompanied by substantial financial settlements from the CBI.
Sources told the Guardian that the total bill could be as much as £1m, accounting for legal fees, settlement deals and pension agreements. The CBI refused to confirm or deny the figure.
The use of NDAs is increasingly controversial after they were used to silence victims of repeat harassers or offenders in a number of prominent cases of workplace misconduct.
MPs on the Treasury committee investigating Sexism in the City recently called for the use of NDAs to be banned in such cases, saying they had the effect of “silencing the victim of harassment and forcing them out of an organisation, while protecting perpetrators”.
Advisers to the CBI, as well as current and former staff, said that in their view, its use of gagging clauses was deeply problematic for an organisation trying to overhaul its culture. They said it called into question the CBI’s commitment to fostering a so-called “speak up” culture.
The Guardian’s investigation last year involved more than 30 staff disclosing concerns about problematic management and cultural issues. Many said they chose to speak to the Guardian because of concerns about how complaints were handled internally.
Speaking to the Guardian, the CBI’s chief executive, Rain Newton-Smith, defended the use of NDAs and said she did not believe the agreements would prevent staff from taking complaints to the police.
“To the best of my knowledge anything we have signed in the past 11 months allows individuals to raise issues with the police,” Newton-Smith said.
The Guardian understands the NDAs relate to allegations dating back to before she rejoined the organisation.
The group claims to speak on behalf of 170,000 businesses, a number largely composed of other membership bodies which are in turn CBI members, such as the National Farmers’ Union, which has 46,000 members in its own right.
Prior to the scandal, which led to an exodus of fee-paying members, it was described as the most powerful business lobbying group in the UK.
The CBI has sought to rehabilitate itself to win back members and regain access to top politicians, such as the chancellor, Jeremy Hunt, and the shadow chancellor, Rachel Reeves.
Newton-Smith said more than 30 companies, such as accountancy firm PwC, have joined or rejoined since the start of the year.
She said that it has put in place a turnaround plan based on recommendations from a legal investigation into the misconduct allegations, as well as advice from a business ethics consultancy.
This includes training for senior management and advice for all staff on how to report concerns and new mechanisms to do so, including a specialist app, as well as changing the makeup of its senior leadership teams.
Newton-Smith said that recent staff survey results showed that employees felt happy with the body’s culture and that they knew how to raise concerns about misconduct.
“We’ve had a really difficult year and I think everyone in this organisation has shown tremendous courage over the past year in implementing a huge programme of change,” she said.
However, alongside its reform efforts the CBI has spent hundreds of thousands of pounds to ensure the silence of former staffers.
The CBI refused to put a figure on the total cost of the agreements. Its precarious finances forced it to lay off one-third of its 300 staff in the past year.
Some of the agreements prevent the signatories from sharing their experiences with other people who have worked at the CBI, sources said. MPs have warned NDAs such as these prevent people from spotting patterns of problematic behaviour.
Newton-Smith, who rejoined the CBI last year having previously worked there for eight years, said that she had not read all of the NDAs but insisted their use was acceptable, especially in preventing staff from sharing commercially sensitive information.
“I’ve seen some but not all,” she said. “You know, it’s important that NDAs – I’m just trying not to use that terminology – but any confidentiality clauses, do not prevent individuals from raising further issues of sexual misconduct.” She said the CBI would continue to use NDAs but would keep their use under review and reflect “best practice”.
Newton-Smith said that the confidentiality agreements since she took over at the CBI were mutually beneficial for the individuals and the organisation. Still, she did not dispute that they prevented open discussion of experiences.
Lawyers told the Guardian that alleged victims of sexual harassment or assault often have to rely on the testimony of others to establish patterns of workplace behaviour.
This can be impossible if other alleged victims have signed NDAs that prevent discussing experiences with current and former staff at an organisation or the media. This is why their use has been criticised for having a “chilling effect” that can avoid detection of repeat offenders, one lawyer said.
Newton-Smith said the NDAs do not stop staff from talking to the police, which opened an investigation into allegations related to the CBI last year.
In March and April last year, the Guardian spoke to more than 35 current and former CBI staff in which they alleged the body had a troubled culture that had become toxic.
Several sources said they took concerns about the culture and complaints of harassment and misconduct to Newton-Smith herself, who – prior to becoming chief executive – was the body’s most senior female manager.
Despite these conversations, which happened before she became the body’s leader in April, Newton-Smith told BBC Radio 4’s Woman’s Hour in February this year: “I didn’t recognise that description of the CBI as having a toxic culture.”
The CBI has a long history of using NDAs in bullying and harassment cases dating back at least a decade.
One ex-staffer, whose NDA was signed before Newton-Smith took charge, said that their deal with the organisation had stopped them from speaking about their experiences with peers – something they believe might have prevented harm to others.
They told the Guardian that they were “horrified” that such deals were still being used by the body.
