Consultation on Confidentiality Clauses

Confidentiality clauses, sometimes known as non-disclosure agreements, NDAs or gagging clauses, are used in a number of different ways in an employment context.

For example, contracts of employment will often seek to ensure that an employer’s trade and business secrets are not revealed, both during and after the termination of the employment relationship. Settlement agreements will also usually include restrictions on the parties’ ability to disclose the existence of the agreement to others and the circumstances surrounding an employee’s departure, as well as non-disparagement clauses to prevent the parties from making derogatory or disparaging comments about each other.

There are, however, certain limitations on the remit of confidentiality clauses. For example, they cannot prevent an individual from making a protected disclosure under whistleblowing legislation.

Whilst confidentiality clauses can serve a useful purpose, recent high profile cases have highlighted concerns that, in certain circumstances, they are being used to intimidate or silence victims of harassment or discrimination at work.

In response, the government has recently published a consultation on ‘measures to prevent the misuse of confidentiality clauses in situations of workplace harassment or discrimination’. The purpose of the consultation, which closes on 29 April 2019, is to examine:

• Whether there should be more limitations on confidentiality clauses in the employment context to make it easier for workers and their advisers to understand when they are permitted in law to make a disclosure to the police (or other people) despite the existence of a confidentiality clause. For example, by prohibiting clauses that prevent disclosures to the police (and others).
• How to ensure workers are clear about the rights they have when they sign a confidentiality clause or start work for a new employer. For example, by requiring all confidentiality clauses to highlight clearly the disclosures that the clause does not prohibit. • How to enforce any new regulations on confidentiality clauses. For example by making a confidentiality clause void if it does not meet the new requirements.

The proposals seek to regulate the use of confidentiality clauses in both employment contracts and settlement agreements.

A copy of the full consultation can be located here.

Impact on schools

At the moment, the proposals are only at a consultation stage. However, with an increased focus in the last few years on workplace sexual harassment and the way in which such incidents are often covered up, it is likely that at least some of these changes will be implemented.

We will keep you updated as matters progress.