Wed 03 Apr 2019

Consultation on the use of confidentiality clauses

The Government is consulting on measures to prevent the misuse of confidentiality clauses.

Confidentiality clauses, gagging orders, non-disclosure agreements (NDAs) - whatever you want to call them - on the back of #MeToo are turning out to be one of the big issues for employment law for 2019.   

Such clauses are - when used correctly - tools to protect commercially sensitive or confidential information. But in the last couple of years their use has been criticised and condemned, not least for their use to cover up sexual harassment.  

It was widely reported that Harvey Weinstein deployed NDAs to keep alleged victims quiet. In addition, the use of NDAs following an event at London's Dorchester Hotel in January 2018, where women employed as waiting staff were allegedly groped and harassed by the guests, led to the use of NDAs being discussed in Parliament and an undertaking being given that the Prime Minister would "look into how these non-disclosure agreements are applied to see if changes are required". 

The issue of NDAs made the headlines again last  October when Sir Philip Green was named as the leading businessman accused by a newspaper of sexual and racial harassment. The Court of Appeal had issued an injunction preventing publication of Sir Phillip's name in circumstances where the five staff members involved had signed NDAs contained in settlement agreements. However, in an unexpected twist, Lord Hain, relying on parliamentary privilege, named Sir Phillip in the House of Lords. 

The UK Government has now published a consultation on measures to prevent misuse of confidentiality clauses  in situations of workplace harassment or discrimination.  The purpose of the consultation, which closes on 29 April 2019, is to examine:- 

  • Whether there should be more limitations on confidentiality clauses in the employment context to make it easier for workers and their advisers to understand when they are permitted in law to make a disclosure to the police or other people despite the existence of a confidentiality clause;

  • How to ensure workers are clear about the rights they maintain when they sign a confidentiality clause or start work for a new employer; and

  • How to enforce any new regulations on confidentiality clauses. 

The Government's proposals include a requirement for the written statement of particulars of employment to include a clear description of the limits of any confidentiality clause it may contain; and for a settlement agreement to be valid, the independent advice a worker receives, would have to cover the nature and limitations of any confidentiality clause and the disclosures a worker is still able to make.

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