Confidentiality clauses in settlement agreements: update for academies

When a member of staff leaves an academy and a financial settlement is agreed, the agreement often includes a confidentiality clause – a provision that prevents one or both parties from discussing the terms of the departure. Since October 2025, the Department for Education (DfE) has tightened the rules around these clauses significantly.

As we reported in our earlier article on this topic, these changes have important implications for academies handling staff exits. It hasn’t taken long for the new rules to bite, with the first known breach now coming to light.

The BMAT Education case

BMAT Education, a 12-school multi-academy trust, entered into a settlement agreement that included a settlement payment above the threshold for DfE consent and confidentiality restrictions. The trust didn’t seek consent before entering into the agreement and, when it later sought retrospective approval, the DfE refused.

What should academies do?

The key lesson from the BMAT Education case is straightforward: you must seek DfE approval before entering into settlement agreements that meet the consent requirements. This includes:

• Any settlement worth £50,000 or more
• Any agreement that includes a confidentiality clause, regardless of value.

This requirement should be factored into the timescales for agreeing a settlement with an exiting member of staff. Academies should also review their precedent settlement agreements to ensure it’s clear that any confidentiality obligations will need DfE approval.

Finally, academies should take legal advice before entering into any settlement agreement that may involve confidentiality obligations or significant payments. Getting it wrong, as the BMAT Education case shows, can lead to non-compliance, regulatory scrutiny and reputational damage.