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Possible Changes to Non-Disclosure Agreements

There cannot be many employers out there who have not now heard of Non-Disclosure Agreements (NDAs). NDAs are a type of confidentiality clause normally used in settlement agreements to prevent publication of sensitive information. The reason they have become so contentious as with many things is not so much that they have existed before but they have recently been found to be misused. NDAs that are used to intimidate victims of harassment into silence have now come under the scrutiny of the Government and it has indicated that it will legislate to stop employers from using these clauses in that way.

The proposals being considered are legislation to make it clear that disclosures to the police cannot in any way be prevented by an NDA. Furthermore, requiring a clear description of the limits of confidentiality within a written statement and ensuring that the worker receives specific independent legal advice on the limits of such clauses. The Government are also considering that any settlement agreement contains set wording which if not used could make the agreement void in its entirety. The consultation runs until 29 April and asks for responses from both workers and employers.

Of course, employees entering into settlement agreements are already under an obligation to get legal advice and it is not uncommon to see whistleblowing exceptions to any Non-Disclosure Agreements. We will be keeping an eye on this fast-developing area and report further in subsequent Briefs.