Is there still a place for Non-Disclosure Agreements (NDAs)?
Simply put, yes – they offer value for employers and employees.
NDAs, or confidentiality clauses as they are better known in the UK, are widely used in employment contracts and settlement agreements to ensure the protection of confidential and sensitive information. They are also used to enable employers and employees to move on when a working relationship has broken down, in the knowledge that neither party can discuss details of the complaints raised, often by both sides.
It is the use of NDAs to prevent disclosure of alleged illegality and serious wrongdoing that continues to get press attention, particularly where some victims of workplace harassment have reportedly been intimidated into silence.
The problem the government is currently trying to solve, even in their own estimation, relates to a “very small minority” of “unethical” employers. Whilst it is clearly important to address the issue, the knock on effect may unintentionally prove damaging for some claimants and prevent parties from settling disputes which both would prefer to resolve.
The proposals in the consultation document issued on Monday (which closes on 29 April 2019) will impact both employment contracts and settlement agreements. The key issues being consulted on are:
- Whether to formally legislate to the effect that no provision in an employment contract, or settlement agreement, can prevent someone from making a disclosure to the police.
- Whether all confidentiality clauses in settlement agreements and contracts, should be required to highlight their limits, and what disclosures are not precluded.
- Whether the independent advice which the employee receives when entering into a settlement agreement should be specifically required to cover the nature and limitations of any confidentiality clause and the disclosures that the individual is still permitted to make.
- Whether to render void any confidentiality clause in a settlement agreement that does not meet the new requirement.
Any changes that may arise from this consultation process will still be some way off. However, those employers who routinely use broad confidentiality provisions in their settlement agreements will need to rethink their approach and whether they are receiving value for the compensation they have agreed to pay. Solicitors working in-house and in private practice may also face disciplinary action if involved in the inappropriate use of NDAs, even when acting in the best interests of their clients.
The unintended consequence of regulating the use of NDAs may be that employers who no longer feel they can have the full protection of confidentiality may be less inclined to settle, resulting in claims escalating. This will mean that more claimants have to pursue their claims through the courts – a daunting prospect for many who may be deterred from making a claim at all as a result. However the government decide to proceed, they should not forget that confidentiality clauses often benefit both parties – the lurid headlines only tell a very small part of the whole story.
For more information, please contact Trevor Bettany.
Flexible working requests: 5 tips for employers
Charles Russell Speechlys advises Acora on acquisition of Westgate IT
Westgate IT specialises in providing IT support to businesses in the South West.
Nick Hurley quoted by the Society for HR Management on the UK government's proposals to prevent workplace sexual harassment
The U.K. government introduced legislation in July 2021 for employers to take proactive steps to prevent sexual harassment on the job.
Returning to work post-lockdown: FAQs for employers
We look at some of the main issues employers may face and the key steps to consider as restrictions ease.
Covid passports - are they workable or just a shambles?
Amelia Goodwin writes for Civil Society on a recent employment tribunal ruling which found that anxiety constitutes a disability
The tribunal found that an anxiety state constitutes a disability for the purposes of the Equality Act 2010.
Face coverings at work post lockdown
While the legal requirement has been lifted, employers may consider face coverings as an appropriate safety measure in certain workplaces.
Charles Russell Speechlys advises Apposite Capital on acquisition of i2a Diagnostics
i2a is a leading provider of laboratory instruments, software and reagents for the clinical microbiology market in France.
Brace yourselves: dentists could be liable for actions of self-employed staff
Nick Hurley interviewed by GB News on the legal ramifications of employers insisting employees have the COVID-19 vaccine
Nick considers the potential dangers of employers setting a precedent by adopting a 'No Jab, No Job' policy.
Government to introduce duty on employers to prevent sexual harassment
Record success for Charles Russell Speechlys’ Private Wealth practice in Chambers HNW 2021 directory
We are delighted to have once again been recognised as a leader in our field in the Chambers High Net Worth 2021 Guide.
Michael Powner writes for People Management and explains how employers can carry out an equal pay audit
How do employers carry out an equal pay audit?
COVID-19 Vaccination – can an employer make it compulsory for employees?
We review what legal issues to take into account when considering to make vaccination compulsory as an employer.
Changes to Right to Work Checks from 1 July 2021
EEA citizens and their family members are required to evidence immigration status in the UK, in the same way as other foreign nationals.
Changes to Right to Rent Checks from 1 July 2021
Following the UK’s departure from the EU, the right to rent checks grace period of six months will end on 30 June.
Michael Powner and Laurence Whymark write for The Caterer on the implications of the new tipping laws on the hospitality industry
Operators will soon have to pass on tips to staff without deductions.
Post-Brexit business visitors and working in France, Germany, Spain and the UK
Watch the final session in a series of webinars on post-Brexit mobility.
Top 7 Data Protection Tips for Employers
Here are our top 7 data protection tips for employers.
Nick Hurley quoted by the Daily Mirror on the legal implications of implementing a 'No Jab, No Job' policy
"'No jab, no job' may seem clear and concise, but whether an employer can make it mandatory is far from straightforward.