7 August 2019
Earlier this year the Government invited views on proposals to improve the regulation of confidentiality clauses, also known as non-disclosure agreements or NDAs (see Moves to stamp out misuse of non-disclosure agreements).
Now, Confidentiality clauses: Response to the Government consultation on proposals to prevent misuse in situations of workplace harassment or discrimination has been published and can be found at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818324/confidentiality-clause-consultation-govt-response.pdf.
More than 550 respondents expressed a variety of opinions on the proposals but overall supported the Government’s intentions to enhance protections for vulnerable individuals.
Already, confidentiality clauses cannot prevent an individual from making a protected disclosure or “whistleblowing”, nor can they prevent an individual from taking a matter to an employment tribunal, though some settlement agreements can waive this right.
What are NDAs?
They are provisions which seek to prohibit the disclosure of information. They serve a useful and legitimate purpose in the employment context, as part of both employment contracts and settlement agreements.
However, a number of cases have come to light where employers have used confidentiality clauses to prevent victims of workplace harassment or discrimination from speaking out.
What does the Government intend to do?
introduce legislation so that no provision in a confidentiality clause can prevent disclosures to the police, regulated and care professionals and legal professionals
produce guidance for solicitors and legal professionals responsible for drafting settlement agreements
legislate so that limitations in confidentiality clauses are clearly set out in employment contracts and settlement agreements
introduce enforcement measures for confidentiality clauses that do not comply with legal requirements in written statements of employment particulars and settlement agreements
legislate to enhance the independent legal advice received by individuals signing confidentiality clauses.
Comment by Peninsula Associate Director of Advisory Kate Palmer
These developments are certainly a leap forward in tackling NDA misuse. They will make it more difficult for employers to prevent employees from coming forward about certain workplace issues, such as harassment, following the signing of an NDA.
That said, while guidance on how confidentiality clauses should now be constructed is forthcoming, the Government has refused to introduce a requirement to include specific wording within them.
Employers will still have a degree of control over how these clauses are constructed and yet more changes to the law may be necessary before the issue of NDA misuse is stamped out completely.