Confidentiality agreements and Non-Disclosure
You may be asked to sign what is often referred to as a settlement agreement as part of arrangements for the termination of your employment. We deal with these agreements on a daily basis for both employees and employers. Such agreements often contain provisions relating to confidentiality agreements and non-disclosure.
To discuss NDAs call 0113 320 5000
What is an NDA in employment?
Non-disclosure agreements (NDAs), sometimes referred to as confidentiality agreements, is a legal contract used in employment settings to protect sensitive information. It sets out clear terms preventing employees from sharing certain confidential details, such as trade secrets, client information, or internal processes, both during and after their employment. In essence, NDAs help businesses safeguard valuable information that gives them a competitive advantage or protects their reputation.
When are NDAs used?
Confidentiality agreements are commonly used at two main stages in employment:
During employment
Many contracts of employment include confidentiality clauses from the outset. These clauses prevent employees from disclosing sensitive business information both while employed and after they leave.
Settlement agreements
NDAs are often included when an employment relationship ends on agreed terms. In this context, they typically prevent either party from discussing the circumstances of the departure, the terms of the settlement, or any workplace disputes, particularly where claims like discrimination, whistleblowing, or unfair dismissal have been raised.
It’s important that any NDA used in a settlement agreement is fair and that the employee receives independent legal advice before signing.
Your Rights - What NDAs Cannot Do
While confidentiality agreements are legally binding, there are important limits to what they can cover.
An NDA cannot:
- Stop someone from reporting a crime or wrongdoing to the police or relevant regulatory authorities (such as the Financial Conduct Authority or Health and Safety Executive).
- Prevent an employee from making a protected disclosure (whistleblowing) under the Public Interest Disclosure Act 1998.
- Waive an employee's right to cooperate with legal proceedings or provide evidence in court or tribunal cases.
If an NDA attempts to unlawfully restrict these rights, it may be unenforceable.
Make sure you understand what you are being asked to sign
The emergence of high profile cases, often involving sexual harassment claims has led to legitimate fears about misuse of such agreements. A wide range of misconceptions about such provisions and so-called non-disclosure agreements (NDAs) has also been reported. For example some people have not realised that a confidentiality clause cannot stop them from talking to the police or a regulator.
Legal restrictions in a non-disclosure or confidentiality agreements
As such agreements place legal restrictions on you, it is best to get independent legal advice before signing. We can advise you on whether you should sign the agreement being offered and what it should contain. Employers will usually provide funds for you to obtain independent legal advice as it is in your interests that you fully understand what you are agreeing to.
If you have concerns, you should raise them before signing the agreement. You cannot be forced to agree confidentiality arrangements if you do not accept the terms on offer. Such agreements and provisions relating to confidentiality must work for you in the future. This means knowing who you can talk to (including family members and medical professionals) and whether there are any time limits on the confidentiality. You also need to know how much you can talk about your role in future job interviews.
What confidentiality agreements cannot stop you from doing.
Confidentiality clauses are not legally binding if they try to stop you talking to the police or a regulator about issues between you and your employer or someone at work. An agreement may not be legally binding if you are not given reasonable time to think about the confidentiality clauses and obtain independent legal advice. You should always ask for a copy of the agreement so you have a record of what has been agreed.
Finally, confidentiality clauses cannot be used to stop whistleblowing in the public interest. Whistleblowing law is complicated and you should obtain specialist advice which we can provide.
Best Practices for Employees and Employers regarding NDAs and confidentiality agreements
Both employees and employers should approach confidentiality agreements carefully:
For employers
NDAs should be clear, specific, and reasonable. They must not be used to silence victims of harassment, discrimination, or illegal behaviour. Employers should ensure employees understand the terms and are encouraged to seek independent legal advice, particularly during settlement negotiations.
For employees
Before signing an NDA, it is crucial to fully understand its terms and seek independent legal advice. Employees should never feel pressured into signing something they do not agree with or that attempts to unlawfully limit their rights.
Well-drafted confidentiality agreements should protect legitimate business interests while respecting the legal rights and dignity of employees.
If you are have concerns about signing an agreement speak to Samira Cakali on 0113 320 5000 or email sbc@winstonsolicitors.co.uk
