Non-Disclosure Agreements (NDAs) - Government response published

The Government has published a response to its consultation on confidentiality clauses/NDAs (Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination).

The Government has published a response to its consultation on confidentiality clauses/NDAs (formally titled Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination), which ran from 04 March to 29 April 2019. See here for the full response. The response addresses a number (but not all) of the recommendations from the Women and Equalities Committee (WESC), following its inquiry of last year and recent report into the use of NDAs in discrimination/harassment cases. It is not adopting some of the more surprising suggestions from the WESC but you will see an increasing focus on the role of the SRA as regulator (and in turn our roles as solicitors).

The response confirms that:
  • The Government will legislate to ensure that a confidentiality clause cannot prevent disclosures to the police, regulated health and care professionals and legal professionals. Recognising the importance of ensuring that professionals to whom disclosures are made are bound by confidentiality, it decided to only extend disclosure permissions to regulated professionals in the health and care and legal sectors, which have regulated, established practices for when confidential information is disclosed. This would not therefore include therapists and counsellors, unless they are accredited/regulated.

  • Legislation will be introduced to ensure that limitations in confidentiality clauses are clearly set out to those signing them. The WESC recommended that the Government should require “standard, plain English” confidentiality clauses and ensure that they are “suitably specific about what information can and cannot be shared with whom”. The Government agrees it is important that individuals understand their rights when signing a confidentiality clause, and provisions in the legislation will require that wording is “clear and specific”.

  • However, the Government will not set a specific form of words to be used when drafting a confidentiality clause. The WESC acknowledged the difficulties with this in its report and instead recommended that the Government legislate on drafting requirements. Agreeing in principle with the WESC recommendation, the Government will legislate to ensure that the limits are clearly set out and that wording is “clear and specific” (as above). Rather than any standardised forms of wording, it will work with the Solicitors Regulation Authority, EHRC and ACAS to produce suitable guidance for solicitors.

  • The Government will extend the legislation (which currently requires that a worker must have received independent legal advice on the terms of the agreement for it to be valid) to ensure that individuals not only receive independent legal advice on the nature of the confidentiality clause, but also on the details and limitations of confidentiality clauses. The SRA will also update its guidance on this. (Note that there is nothing to require employers to pay for this but we anticipate that employees' advisors will ask for an increase).

  • It will introduce new enforcement measures for confidentiality clauses that do not comply with legal requirements. However, it is not entirely clear on how this will be achieved. Most likely, it seems that any confidentiality clause which does not follow the legal requirements will be void (without voiding the whole settlement agreement). There is an obvious lack of commitment to the WESC recommendation that it should be an offence for an employer or adviser to propose a confidentiality clause intended to prevent making a protected disclosure.

  • With regard to confidentiality clauses in employment contracts, the Government will also introduce a requirement to be clear on the limits of such clauses. Employers that fail to meet the requirements may face parasitic claims from workers for additional compensation in the Tribunal (if they bring a successful claim) or claims for a declaration (in the same way as is currently the case if particulars of employment are not provided within two months).

  • The Government does not plan to introduce any monitoring or reporting mechanism at this stage i.e. to report annually on the number of harassment complaints or the number of NDAs. Instead, it will focus on introducing measures to prevent sexual harassment and discrimination in the workplace in the first place.

The reforms are of course part of a wider response to sexual harassment in the workplace. There is the ongoing consultation launched by the Government Equalities Office on 11 July 2019, which is looking at whether the current legal framework is operating effectively and other non-legislative steps to tackle inappropriate workplace culture. We can expect a response to that towards the end of 2019/early January 2020.

The Government also confirms that it will respond separately in full to the WESC report.

For further information about the Government consultation which closed on 29 April 2019, see this previous elexica article.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.