Confidentiality clauses or non-disclosure agreements (‘NDAs’) have become a topic of significant interest because of how they can be used to prevent employees from reporting allegations of sexual harassment or other similar misconduct.
The Government recently published its response to a consultation on the regulation of confidentiality clauses, which sets out a number of proposals for new legislation in this area. This consultation had taken place against the background of various other interventions and proposals in this area. These included an EHRC report on sexual harassment at work and a Women and Equalities Committee report on sexual harassment in the workplace, which called for NDAs to be better controlled and regulated. In addition, the EHRC is expected to publish wider guidance on tackling sexual harassment later this year.
The EHRC’s guidance
The new guidance from the EHRC provides a significant steer on both the current law and good practice for both employers and workers. The introduction makes clear that it is concerned only with confidentiality agreements that could prevent a worker from speaking about any act of discrimination, harassment or victimisation, which contravenes the Equality Act.
Confidentiality agreements in terms and conditions of employment
The guidance recognises that employers can legitimately seek to stop a worker discussing or using confidential information outside of work, either during their employment or after their employment has ended. There are, however, legal limits on this. The good practice guidance is set out below.
Make it clear from the wording what the worker can or cannot do, and that the agreement does not stop them from speaking about any form of discrimination. The guidance suggests an employer should include a definition of what it considers to be confidential information, and its policies should make clear how workers can report discrimination and that reports will be taken seriously
Do not put workers under pressure to sign a confidentiality agreement. Allow them time to consider it and discuss it with an adviser
Give the worker a copy of the signed confidentiality agreement to keep for their records
Resolving disputes with workers
Confidentiality agreements that stop workers discussing acts of discrimination are commonly included in settlement agreements and Acas-conciliated agreements. In some cases this will not be lawful, but in any event the EHRC’s good practice guidance is set out below.
Unlawful confidentiality agreements
The guidance also covers the types of confidentiality agreements that cannot be enforced. These include those that prevent protected disclosures under whistleblowing laws, discussion of criminal activity, or activities required by law such as giving evidence or making a report to a regulator. Good practice guidance says it should be clear to the worker from the wording of the settlement agreement that it will not stop them from doing these things.
It is surprising that the EHRC has chosen to publish this guidance now, as we are currently awaiting draft legislation to implement the Government’s recent proposals. The guidance only covers the current law, so it will be out of date as soon as any new laws are published on matters such as to whom disclosures can be made and what wording must be included in confidentiality clauses.
This document is nonetheless likely to have a significant effect on discussions between employers and workers about confidentiality agreements, particularly as part of a settlement agreement. Much of the EHRC’s good practice guidance goes further than the law requires, but can still be used in negotiations between the parties.
Overall, the guidance takes the approach that use of NDAs when resolving disputes should be the exception rather than the norm, with workers being given both time and money to consider whether they are willing to agree. This is quite a shift from the current practice of many employers, who present settlement agreements with a standard, template confidentiality clause, often required them to be signed within a short timeframe, and make a minimal contribution towards legal fees.
The good practice guidance is not legally binding, but will undoubtedly be used by workers and their advisers to question the use of broad confidentiality clauses in agreements that settle discrimination claims. It remains to be seen how this will intersect with any forthcoming legislation.