Last year, the Government promised to crack down on the misuse of non-disclosure agreements (NDAs).

Now the arbitration service Acas has published advice for employers and workers about NDAs, warning about misuse, particularly with regard to preventing someone from reporting sexual harassment in the workplace.

NDAs can also be known as confidentiality clauses, gagging orders or hush agreements.

Available at archive.acas.org.uk, the new guide accepts that they are sometimes used legitimately to restrict workers from disclosing sensitive commercial information or trade secrets to people outside their place of work.

However, employers must be aware that they cannot be used to prevent:

  • the reporting of discrimination or sexual harassment at work or to the police

  • whistleblowing by a worker seeking to expose wrongdoing in the workplace

  • the disclosure of a future act of discrimination or harassment.

Acas Chief Executive Susan Clews explained: “The news has reported on victims coming forward that have alleged appalling abuse by high-profile figures who have then tried to use NDAs to silence whistleblowers. Our new advice can help employers and their staff understand what NDAs are, how to prevent their misuse and [give] examples where they will not be needed.”

Correct use of NDAs

Acas makes clear that if NDAs are to be used, then employers must:

  • always give a clear explanation of why one is being proposed and what it is intending to achieve

  • ensure that a worker is given reasonable time to carefully consider it as they may wish to seek trade union or legal advice on its implications

  • think about whether it is better to address an issue head on rather than try to cover it up

  • never use these agreements as a matter of routine.

Comment by Peninsula Associate Director of Advisory Kate Palmer

It must be right that there are legitimate uses of NDAs in the workplace. Employers need to protect their confidential and sensitive information and to prevent unauthorised access to customer details and key financial information by means of express contractual clauses.

It is the misuse of NDAs — to stop an employee speaking out about harassment, discrimination and other unlawful behaviours — that is and should be outlawed.

The use of a gagging clause by an employer in such circumstances is unacceptable and has no place in the modern workplace.

This advice from Acas, particularly in the context of sexual harassment, is a welcome addition to the guidance on the use of NDAs and another reminder to employers of how these confidentiality agreements should and should not be used.

Employers should refer to the guidance when considering using an NDA.

Last reviewed 11 February 2020