March 11, 2019

The proposed new rules include enshrining in law for the first time a rule that individuals cannot be prevented from reporting crimes, harassment or discrimination to the police.

The Government recognises that many businesses legitimately use NDAs and confidentiality clauses in agreements to prevent disclosure of confidential information. However, it says, in recent months there has been increasing evidence to suggest that NDAs and confidentiality clauses are being abused by a very small minority of employers to intimidate whistleblowers, and to conceal harassment and discrimination incidents, including sexual assault, physical threats and racism.

The Government’s proposals aim to help put an end to the unethical use of these agreements and encourage good practice from employers and lawyers. They include:

• clarifying in law that confidentiality clauses cannot prevent people from speaking to the police and reporting a crime (or prevent the disclosure of information in any criminal proceedings);
• requiring a clear, written description of rights before anything is signed in confidentiality clauses in employment contracts or within a settlement agreement; and
• extending the law that means a worker agreeing to a settlement agreement receives independent advice; the advice must cover the limits of any confidentiality clauses in the settlement agreement so a person is in full possession of all the relevant facts; this will help to prevent employees from being duped into signing gagging clauses that they were unaware of.

The Government says that its proposals to extend the requirement to receive legal advice to cover limits on confidentiality clauses, and to provide that signatories must be given a clear overview of their rights, will help end the unethical practice of misusing NDAs.

The Government is seeking views on its proposals. The purpose of the consultation is to:

• better understand how confidentiality clauses and the legal framework around them work in practice; and
• assess what changes are required to ensure individuals are appropriately protected from their misuse.

The consultation closes at on 29 April 2019. To access the proposals and consultation, click here.