Why use a confidentiality clause?
Confidentiality clauses (also referred to as Non-Disclosure Agreements or NDAs) are frequently included in settlement agreements and are often a crucial feature in the settlement of a claim. They can operate for the mutual benefit of both parties.
Employees may consider that confidentiality is a price worth paying to avoid prolonged, uncertain and costly litigation and employers want to protect commercial interests and their reputation.
When should NDAs not be used?
NDAs are not prohibited but they should not be used:
- (a) As a means of preventing, or seeking to impede or deter a person from:
- reporting misconduct to a regulator;
- making a protected disclosure under the Public Interest Disclosure Act 1998 (any agreement that purports to prevent an individual from making a protected disclosure under whistleblowing legislation is void);
- reporting an offence to a law enforcement agency such as the police;
- co-operating with a criminal investigation or prosecution;
- (b) As a means of improperly threatening litigation against, or otherwise seeking improperly to influence, an individual in order to prevent or deter or influence proper disclosure.
New Consultation launched
Following the exposure of serious sexual assault allegations in the press and the discussions surrounding the #Metoo movement, the Government launched a new consultation on 4 March 2019 to explore the ways in which measures can be implemented to prevent the misuse of confidentiality clauses in situations where there has been workplace harassment or discrimination.
Potential misuse of NDA’s has become world news. The New York Times first reported substantial allegations of sexual harassment on 5 October 2017 against Harvey Weinstein and the rumoured multiple NDAs he has entered into. Since then various other allegations have come out about high profile and famous individuals and their use of NDAs to prevent former employees from speaking out about alleged experiences of bullying and sexual assault.
This consultation will be looking at various areas including:
- Evidence of bad practice;
- Disclosures to police;
- NDAs in settlement agreements;
- Prescribed wording; and
- Employment contracts.
For more information on the consultation please visit:
Closing date for the consultation: 29 April 2019.
What will happen next?
There have been various recommendations already made for changes in this area including by The Equality and Human Rights Commission (EHRC) in their report published in March 2018 called “Turning the Tables: Ending Sexual Harassment at Work”. For more details see: https://www.equalityhumanrights.com/en/publication-download/turning-tables-ending-sexual-harassment-work
Also the Fawcett’s Sex Discrimination Law Review in January 2018 recommended strengthening the laws on sexual harassment in the workplace. See https://www.fawcettsociety.org.uk/sex-discrimination-law-review-final-report for more details.
The Women and Equalities Committee also published a report following their inquiry into sexual harassment in the workplace in July 2018.
It will be interesting to see what outcome this latest consultation will result in. It is hoped that the Government will strengthen the protection for employees where there has been harassment or discrimination in the workplace as well as providing guidance on best practice in relation to the use of NDAs (including in relation to settlement agreements).
Get in touch
If you need any further advice, please do get in contact. Call Philomena Price, Director and Employment Law Solicitor at Spratt Endicott Solicitors on 01295 204147, or email firstname.lastname@example.org.
*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.