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Limitations on the use of confidentiality clauses and NDAs

Following the success of the 'me too' movement, the government has recently undertaken a consultation into the use of confidentiality clauses and non-disclosure agreements in the workplace.

As a result of the consultation, the government has now said it will introduce legislation to limit the use of confidentiality clauses and NDA’s in the workplace to ensure that individuals have a right of redress to serious and criminal complaints. In particular, it is expected that the new law will ensure that no provision will prevent a signing individual from making disclosures to the police, regulated health and care professionals, or legal professionals.

This will ensure victims, for example those of sexual harassment and discrimination, are not placed in circumstances where they believe they cannot make such a disclosure because they have signed a confidentiality agreement.

It is also suggested that individuals may need to seek independent legal advice on the terms and effect of the clause/agreement, much in the same was as is required for settlement agreements, before they can become legally binding.

The proposal to outline the limits of confidentiality clauses to individuals will also be taken forwards by the introduction of new laws. This includes requiring confidentiality clauses in settlement agreements to set out their limits on disclosure and clauses in employment contracts will legally need to set out their limits in a written statement of particulars. Laws introduced for this will require the wording to be clear and specific, for example, the wording needs to be clear as to what information can or cannot be shared and which parties this can be shared with.

Enforcement of confidentiality clause which do not comply with the new legislation is expected to be brought through the employment tribunal, where additional compensation is expected to be awarded when a successful claim is brought.

The new government legislation is awaited, and we shall provide a further update once the draft legislation is published.


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