In the wake of the #MeToo movement, non-disclosure agreements have been a hotly-debated topic, particularly where they are used to prevent employees from bringing claims of sexual harassment. Following on from last year’s proposals from both the Women and Equalities Committee and the Human Rights Commission, the UK government has published a consultation paper seeking views on options to prevent the misuse of confidentiality clauses. The consultation covers both general provisions in employment contracts and specific clauses in settlement agreements.

The proposals

One of the proposals put forward is that confidentiality clauses should make clear that any disclosure to the police would be excluded from their scope, whether in settlement agreements or employment contracts. Currently, such disclosures are only explicitly protected if they meet the strict legal definition of whistleblowing, the legislation for which is complicated and difficult for workers to follow. The government is seeking to clarify the position, so that workers are in no doubt about their ability to report incidents to the police. In addition, the consultation paper puts forward the idea of legislation to introduce new wording requirements that confidentiality clauses must clearly set out their scope, limitations and effect. Again, the intention here is to ensure that workers are aware of their rights.

Non-compliance

In terms of enforcement, the consultation paper suggests that confidentiality clauses in settlement agreements should be void in their entirety if they do not comply with the new wording requirements mentioned above. The aim of the proposal is to encourage employers to get the drafting right in the first instance to prevent disputes further down the line. It is worth noting, however, that, although the consultation paper suggests some significant changes, the government has stopped short of proposing a ban on non-disclosure agreements relating to harassment and discrimination. This is on the grounds that confidentiality may benefit the worker as well as the employer, and such a ban may make employers less likely to consider settlement. The proposals do, however, set out a different approach for employment contracts, recognising that striking down entire confidentiality provisions as void would leave a company’s trade secrets exposed to potential disclosure. Instead, the government plans to extend the enforcement mechanism that exists in relation to the requirements for wording of written statements of particulars which can already be enforced in employment tribunals.

Comment

The responses to the consultation promise to make for interesting reading, particularly in the current political climate with regard to harassment and bullying. Employers may well choose to review any confidentiality clauses that they currently have in place against the standards outlined in the consultation paper in order to give their clauses a “health check” against what is likely to be considered best practice going forward. The consultation is open until 29 April 2019.