A leading businessman who was investigated for alleged sexual harassment and racial abuse of staff by The Telegraph has been granted an injunction against to prevent the newspaper revealing the scandal.
Comment in the wake of the injunction against the newspaper, Theresa May pledged to hasten measures to improve regulation around so-called gagging clauses after a newspaper was barred from publishing allegations against a company boss.
The Prime Minister on Wednesday said some employers were using non-disclosure agreements (NDAs) “unethically” as she criticised “abhorrent” sexual harassment in the workplace.
The Telegraph wants to reveal what it calls “alleged sexual harassment and racial abuse of staff”, who have been prevented from discussing their claims by NDAs.
The three judges granted an interim injunction and said the case should go to trial after the senior executive in a company group appealed against an earlier decision.
Speaking in the House of Commons, Labour MP Jess Phillips asked Mrs May to comment on the use of NDAs to “silence” accusers, adding: “It seems that our laws allow rich and powerful men to pretty much do whatever they want as long as they can pay to keep it quiet.”
The Prime Minister said she would bring forward consultation measures to improve regulation and make it “absolutely explicit” when the contracts cannot be enforced.
“Non-disclosure agreements cannot stop people from whistleblowing, but it is clear some employers are using them unethically,” she said.
Ms Phillips has suggested she would use her parliamentary privilege to name the company boss in the Commons if an accuser came forward to her.
Mrs May’s official spokesman later said that NDAs “should never be used to cover up criminal activity”, adding that details of the work started earlier this year would be announced “imminently”.
Labour said it was committed to outlawing NDAs that prevent disclosure of victimisation, harassment or discrimination.
The appeal judges ruled it is likely the boss could establish that a “substantial” part of the information was obtained through “breach of duty of confidentiality” by those who broke the NDAs or were aware of them.
In August, High Court judge Mr Justice Haddon-Cave refused to gag the newspaper but the executive - identified in court papers as ABC - and managers at the two companies mounted a challenge.
Master of the Rolls Sir Terence Etherton, Lord Justice Underhill and Lord Justice Henderson outlined their decision in a ruling published on Tuesday.
In all five cases complaints had been “compromised by settlement agreements” under which “substantial payments” were made to the employees who had complained, they wrote.
Judges said the claimants felt that information “had been disclosed to the newspaper by one or more of the complainants, or by other employees who were aware of the information and of the non-disclosure agreements”.
They said there was a “real prospect” that publication would cause substantial and possible irreversible harm to the claimants.
The judges granted “an interim injunction preserving the confidentiality of the information pending a full trial”.
The Society of Editors criticised the decision as having a chilling effect on press freedom and therefore the public’s right to be informed.
“The increasing use of NDAs by the rich and powerful to block publication of any information they do not wish to be aired in public is a dangerous road for a free society to travel,” the society’s director Ian Murray said.
NDAs have been under scrutiny since it emerged that disgraced movie mogul Harvey Weinstein used them to keep alleged victims quiet.
Dozens have accused him of sexual harassment and assault, which he denies.