Non-disclosure Agreements

Non-disclosure agreements can be used for lots of different reasons, one of which could be as part of a settlement agreement.

Settlement agreements are used by employers to settle any legal claims an employee might have against them. Often that involves a payment to the employee and so it’s understandable that in return the employer requires that certain things are kept confidential.

In the past it was common for such agreements to include a blanket confidentiality clause preventing the employee from talking about anything to do with their employment. The effect was that the employee was completed gagged.

Following the #MeToo movement in 2006, there was a realisation that such wide clauses were not appropriate and contributed to individuals like Harvey Weinstein getting away with sexually abusing women for as long as he did. Whilst settlement agreements still contain confidentiality clauses, as a result of this realisation it has now become common for there to be exceptions to allow the employee to report matters to the police or a regulator.

The Government has this week announced a strengthening of protections for employees when it comes to confidentiality clauses. The change will form part of the Employment Rights Bill which is still going through parliament. Once passed, the law will state that any clause which tries to prevent an employee from making an allegation of, or disclosing information about, harassment or discrimination will be void. This will also include talking about how an employer has responded (or not responded) to any allegation or disclosure.

This will add to a number of existing legal requirements which a settlement agreement has to satisfy in order to be valid. If you need advice on the use or drafting of settlement agreements, or if you have been given a settlement agreement which you need advice on, you can get in touch here.