New laws on NDAs - what business need to know

By: Kirsten Cluer

Date: 2 August 2019

A worried employee sits at her computer and checks her contract for confidentiality clauses.

New laws have been proposed to ban employers using non-disclosure agreements (NDAs) to silence victims of workplace abuse.

Initially brought in to protect commercially sensitive information, NDAs have been manipulated into common ‘gagging clauses’ for companies that want to hush up allegations of unlawful discrimination and harassment.

MPs have been calling for new laws to be introduced to tackle the misuse of NDAs for some time, especially after the BBC revealed in April that a high number of academics from UK universities had been “harassed” out of their jobs and made to sign NDAs after making complaints.

Incredibly, universities have spent around £87 million in pay-offs with NDAs since 2017, according to figures obtained by the BBC - money which some academics argue was used to stop bullying, discrimination and sexual misconduct allegations becoming public.

It is important to note that signing an NDA does not prevent staff or students from reporting criminal acts to the police or regulatory bodies, or from making a disclosure under the Public Interest Disclosure Act 1998.

In particular, UK employers need to be aware that the new laws will ban NDAs which stop people from disclosing such information to the police, regulated health and care professionals, or legal professionals, such as doctors, lawyers, or social workers.

The effect of the new laws

All NDAs, or any use of a confidentiality clause, need to be clear and specific in scope. In the case of agreements signed at the beginning of an employment relationship, the new legislation will require the limitations of the confidentiality clause to be included as part of a written statement of particulars.

For instance, employers must make the limitations of a confidentiality clause clear, in plain English, to an employee within a settlement agreement and in a written statement, so that individuals signing them fully understand what they are signing and their rights in doing so.

The laws will also extend the current legislation so that individuals signing 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.

What you need to do now

The new legislation will be introduced when parliamentary time is available. UK employers now need to begin reviewing how they issue NDAs, and be aware that all future NDA agreements will not prohibit employees from reporting wrongdoing in the public interest, nor prevent them from taking a matter to an employment tribunal.

Ultimately, the legislation will help put an end to the unethical use of NDAs, and encourage good practice from UK employers.

Sponsored post. Copyright © 2018 Kirsten Cluer, HR consultant and owner of Cluer HR

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