It is well known that a select number of individuals and companies used confidential clauses in Non-Disclosure Agreements (NDAs) and Settlement Agreements to prevent the reporting of misconduct to organisations like the police. This was seen as unjust and society wanted change. However, there has been no change of law yet just numerous consultations and non-binding guidance including by ACAS ( New ACAS guidance on the use of NDAs).
The current legal position is that an employer cannot prevent an employee or ex-employee from making a protected disclosure. The government has listened to the consultations and agreed to implement the following changes:-
- Guaranteeing that nothing will prevent someone from reporting a crime to the police, regulated health and care professionals and legal professionals;
- Clarifying the confidentiality limits in NDA’s; and
- Requiring employees to take legal advice on the confidentiality clauses in a settlement agreement.
The government previously said that confidentiality clauses that did not follow with the proposed changes would be void. However , in their latest response to the consultations this precise wording was not used. We will only have clarity once the government publishes the proposed legislation. There is no clear timeline as to when the proposed changes will be implemented. In the interim solicitors drafting confidentiality clauses should be adhering to the SRA Warning Notice (Warning notice- Use of Non Disclosure Agreements)
Confidentiality clauses are still useful but need to be limited to ensure they do not prevent crimes and/or misconduct being reported. Redrafting of these clauses will also be required following the decision in Duchy Farm Kennels V Steels (Settlement Agreements and Confidentiality Clauses.
Please contact us if you require advice on a confidentiality clause contained in an NDA or Settlement Agreement.