This past week has seen the NHS come under fire for including a gagging order in a compromise agreement with Gary Walker, the ex-chief executive of United Lincolnshire Hospital trust, which prevented him from speaking out about his concerns regarding patient safety.
The NHS clearly operates in a very different environment to our clients but it has got us thinking about what can and can’t be achieved through compromise agreements.
Compromise Agreement with a Gagging Order
The story with Walker is that he was allegedly forced from his position in 2010 after he raised concerns that patient safety was being compromised because of the drive to hit government set targets. On departure he reportedly received a termination payment of £500,000 in return for signing a compromise agreement which contained a gagging clause which prevented him from discussing the circumstances around his departure.
Last week he broke this clause by speaking out on BBC radio, and has now received a letter from the NHS trust’s legal team stating that he needs to withdraw his statements and that a breach of the agreement could result in him being asked to repayment the settlement amount.
MP and health committee chairman Stephen Dorrell has waded into the argument urging health secretary Jeremy Hunt to ensure that the trust is prevented from taking any action which may prevent Mr Walker giving evidence to the committee currently investigating the standards at 14 trusts.
What Can be Achieved through a Compromise Agreement?
Many of our clients use compromise agreements as a way to deal with employee terminations that run a high risk of ending up in an employment tribunal.
They are used when it becomes apparent that a particular employee no longer has a future with the business for a variety of reasons but dismissing them through the normal process is not achievable. They can also be used when an employer acknowledges that they have made a mistake and are unlikely to be successful in an employment tribunal setting.
Rather than dragging both parties through the tribunal process and incurring large legal fees, the employer enters into a compromise agreement with the employee. In return for signing the compromise agreement, an employee receives a financial settlement and agrees not to bring a tribunal claim, therefore in effect waiving their rights under key pieces of employment legislation.
Most compromise agreements do contain a clause requiring that both employee and employer do not disclose the terms of the agreement or the reasons behind its existence.
The difference with the Walker case is that one outcome of the agreement was that it prevented him from raising an issue of genuine public interest. Walker would be offered protection under the Public Interest Disclosure Act 1999 and it would appear that these are not rights which you can sign away through a compromise agreement.
Limitations of Compromise Agreements
It’s important that businesses realise that compromise agreements cannot be used as a way to buy the silence of employees who have discovered illegal activity or information which is of genuine public interest.
We work a lot with care homes and this is another sector which has come under fire regarding standards of care (to clarify none of our clients provide anything other than exceptional levels of care). If a care home was to try to enter into an agreement with an employee who threatened to take evidence of poor care to the press, then it is unlikely that they would be able to enforce a gagging clause regardless of how much they had paid to the ex-employee.
One point to note on all of this is that it is yet to be tested through the courts. It’s possible that the NHS trust would be successful in requiring Walker to repay the settlement fee for breaking the clause but our feeling is that they are unlikely to try!