The government has issued a consultation document seeking views on new measures to prevent the misuse of confidentiality clauses, in particular where workplace harassment or discrimination is alleged. Click here for the relevant consultation document.

In an employment context, confidentiality clauses are typically included in employment contracts and settlement agreements (on the termination of an employee’s employment). There are already some ways in which the use of confidentiality clauses is limited. For example, confidentiality clauses cannot be used to prevent an individual from making a protected disclosure.

Whilst the government recognises that confidentiality clauses have a “right and proper place” in the employment context, it also considers that some clauses are unreasonably expansive (for example, preventing an individual from speaking with the police or a doctor). Accordingly, it considers that further limitations are needed. In particular, the government is seeking views on the following:

  1. Legislating to ban confidentiality clauses which prevent a victim making disclosures to the police.
  2. Ensuring any confidentiality clauses in employment contracts are included in the written statement of particulars of employment issued at the start of the employment relationship.
  3. Requiring all confidentiality clauses to expressly set out what disclosures an individual is not prohibited from making, and making any confidentiality clauses in settlement agreements which do not comply with this requirement void in their entirety.

Comment

The Women and Equalities Select Committee recommended that the government legislate to require the use of standard, approved confidentiality clauses. As such, and in light of media coverage regarding the potentially unethical use of non-disclosure agreements by powerful figures in business, the continued focus on confidentiality clauses is perhaps not surprising. However, the consultation document does express reservations about the use of standard, approved confidentiality clauses on the basis that approved wording could go out of date as protections develop over time.

The closing date of the consultation is April 29, 2019. Notwithstanding the outcome of the consultation, we would recommend that all confidentiality clauses expressly state what disclosures an employee is not prohibited from making. They should also be drafted in plain English. The types of disclosures that should be allowed and expressly referred to when drafting employment contracts and settlement agreements, in addition to protected disclosures, include but are not limited to disclosures to:

  • a regulator or equivalent body regarding actual or suspected misconduct, wrongdoing or serious breach of regulatory requirements;
  • report a criminal offence to a law enforcement agency (and co-operating with any law enforcement agency regarding a criminal investigation or prosecution);
  • participate in investigations or proceedings brought by regulatory/professional bodies relating to matters arising from an individual’s employment;
  • comply with other legal or regulatory obligations;
  • professional advisers and doctors (or those responsible for providing healthcare to an individual);
  • immediate family;
  • relevant tax authorities.