Confidentiality clauses have a right and proper place in the employment context. They can be used primarily in two ways – either as part of an employment contract, where there is a need to protect business secrets for example, or as part of a settlement agreement, in order to allow both sides in an employment dispute to move on with a clean break. However, they can be open to abuse, as recent newspaper reports have revealed.
In an attempt to crack down on the use of non-disclosure agreements (NDAs) and confidentiality clauses by employers to cover up incidents of sexual and racial harassment in the workplace, the Government has issued a consultation document on ways to tighten up the rules that apply to them.
In addition to the existing legal limitations that apply to confidentiality clauses, the proposals seek views on further limitations and how best to enforce them. These include:
- Legislating that workplace confidentiality agreements cannot be used to prevent workers reporting harassment or discrimination to the police or prevent disclosure in any criminal proceedings;
- Requiring that a clear, written description of a person’s rights are made available before they sign a confidentiality clause in an employment contract or a settlement agreement, so that they fully understand their rights; and
- Extending the law to ensure workers agreeing to confidentiality agreements receive independent legal advice making clear their nature and what the limitations are.
The consultation closes on 29 April 2019.
