Tighter control over the use of Non-Disclosure Agreements

New legislation to prevent company bosses misusing Non-Disclosure Agreements (NDAs) for former employees has been announced by the government.

Ministers say that while NDAs can be used by businesses for several legitimate reasons, there are occasions where they are being abused and those who sign them not made aware of their rights.

There have been cases of NDAs being used to cover up sexual harassment, racial discrimination and assault. Victims are sometimes left unsure of their rights.

Under the new legislation, businesses will be prohibited from using NDAs to prevent individuals from disclosing information to the police, regulated health and care professionals, or legal professionals,

Employers will need to make clear, in plain English, the limitations of a confidentiality clause within a settlement agreement and in a written statement for an employee, so individuals signing them fully understand their rights and what they are signing.

Employees who sign NDAs will get independent legal advice on the limitations of a confidentiality clause – including making clear that information can still be disclosed to police, regulated health and care professionals, or legal professionals regardless of an NDA.

Enforcement measures will also be brought in to deal with confidentiality clauses that do not comply with legal requirements - for example, an NDA in a settlement agreement that does not follow new legislative requirements will be legally void.

A government spokesperson said: “We will not tolerate the use of NDAs to silence and intimidate victims from speaking out. The new legislation will stamp out misuse, tackle unacceptable workplace cultures, protect individuals and create a level playing field for businesses that comply with the law.”

Please contact us for more information about the issues raised in this article or any aspect of employment law.