Confidentiality clauses: Evolving position

Confidentiality clauses: Evolving position's Tags

Tags related to this article

Confidentiality clauses: Evolving position

Published 11 diciembre 2019

Ignited by the #MeToo movement, there continues to be significant interest around the topic of sexual harassment in the workplace and the use of non-disclosure agreements (NDAs) in the employment sphere.

Government’s response to Women and Equalities report on non-disclosure agreements

The Women and Equalities Select Committee has published the government’s response to its report on the use of NDAs in discrimination and harassment cases. The government rejected many of the more radical proposals of the Committee and reiterated the legislative proposals that it set out in its consultation response in July 2019:

  • Legislate so that no provision in a non-disclosure agreement can prevent disclosures to the police, regulated health and care professionals and legal professionals.
  • Legislate so that limitations in non-disclosure agreements are clearly set out in employment contracts and settlement agreements.
  • Produce guidance for solicitors and legal professionals responsible for drafting settlement agreements.
  • Legislate to enhance the independent legal advice received by individuals signing non-disclosure agreements.
  • Introduce enforcement measures for non-disclosure agreements that do not comply with legal requirements in written statements of employment particulars.

Link to Response: https://publications.parliament.uk/pa/cm201919/cmselect/cmwomeq/215/215.pdf

EHRC guidance

The Equality and Human Rights Commission (EHRC) has published guidance on the use of confidentiality agreements in discrimination, harassment and victimisation cases. The guidance is not binding on employers, but intended to set out good practice. It addresses settlement agreements but also deals with confidentiality clauses at the start of the employment relationship which seek to protect confidential information. For example, in employment contracts or separate confidentiality agreements.

The guidance states that:

  • There is evidence that some confidentiality agreements used at the start of employment are drafted in such a way as to stop workers discussing discrimination that occurs in the future, or are drafted in a way that makes it unclear whether the worker can discuss an act of discrimination that occurs in the future, which in turn discourages them from doing so. Employers should carefully consider the wording of such agreements. It should be clear from the wording what the worker can or cannot do and that the agreement does not stop them from speaking about any form of discrimination.
  • With regards to confidentiality provisions in settlement agreements, employers should carefully consider the wording in each case to decide whether it is necessary.
  • Confidentiality provisions should make it clear they do not prevent employees from reporting matters to the police, regulators, lawyers, medical professionals or immediate family members and, where necessary, potential employers.
  • Employers should pay for employees to receive independent advice on the terms of a settlement agreement, including any confidentiality provisions, even if the employee ultimately decides not to sign (although employers can put a reasonable limit on the costs it is willing to pay, as now).

The guidance also recommends that large employers keep a central record of confidentiality agreements that they enter into, to allow them to monitor potential systemic discrimination issues. Where a settlement agreement has been used to settle a claim, the employer must not treat this as the end of the matter. Rather, in order to fully defend future claims, the employer must still investigate the allegations where possible, take any reasonable further steps to address the discrimination, and take reasonable steps to prevent discrimination occurring again.

Link to guidance: https://www.equalityhumanrights.com/en/publication-download/use-confidentiality-agreements-discrimination-cases

What do both of these developments mean for employers?

It is not yet clear when the above legislation will be introduced and its implementation may well be affected by the result of the upcoming general election. It may be that some of the ECHR guidance may need to revised as and when the legislation is enacted. We are also expecting further guidance from Acas and the Solicitor’s Regulation Authority. However, again the timetable for this is unclear.

In the meantime, employers should review any confidentiality clauses in employment contracts and settlement agreements to ensure they set out the limitations of the clause. Further changes may be required when we know the exact content of the new legislation. We will keep you updated.

Authors

Ceri Fuller

Ceri Fuller

London - Walbrook

+44 (0)20 7894 6583

Zoë Wigan

Zoë Wigan

London - Walbrook

+44 (0)20 7894 6564

Hilary Larter

Hilary Larter

Leeds

+44 (0)113 251 4710

< Back to articles