Non Disclosure Agreements

In the light of public pressure to reform the law on non-disclosure agreements, what can employers do to make a NDA more likely to be enforced?

  1. have it as a standalone agreement, rather than as a confidentiality clause in a wider employment contract or settlement agreement. The fact the contract is all about confidentiality, rather than it being one clause of many, is a factor in balancing the public interest in enforcing a contract.
  2. include exceptions. Make it clear the NDA doesn’t prohibit disclosures to regulatory bodies, or information which is already in the public domain.
  3. limit the duration. Unless there is a good reason otherwise, keep the NDA limited to between two and five years after employment ends. By that time, the emotional drivers to tell the story have faded, and the employee has probably moved on with their life. There’s nothing legally wrong with stating it lasts forever, but it makes it less unattractive to a judge if it is time limited.
  4. invite the signatory to obtain independent legal advice before signing the NDA, and make sure that a lawyer countersigns in an advisor’s certificate. This is an important safeguard to avoid the suggestion that you took unfair advantage of your employee. There is a recent case on this – ABC v. Telegraph Media Group Limited [2018] EWCA Civ 2329

March 2019 – Confidentiality Clauses – Proposals for Reform

The government has issued a consultation document seeking views on new measures to prevent the misuse of non-disclosure agreements in situations of workplace harassment or discrimination.

Confidentiality clauses serve a useful purpose in the employment context. They can be used primarily in two ways: as part of employment contracts, to protect trade secrets for example, and as part of settlement agreements, for example to allow both sides of an employment dispute to move on with a clean break.

There are some limits on their use: mainly that confidentiality clauses are void if they purport to prevent someone making a protected disclosure, or taking a case to a tribunal (unless within a COT3 or settlement agreement).

The government is now consulting on further measures:-

• legislating to ban confidentiality clauses which prevent a victim reporting or discussing potential criminal acts to/ with the police

• ensuring any confidentiality clauses in employment contracts (as contrasted with settlement agreements) are included in the written statement of particulars of employment issued at the start of the employment relationship

• requiring all confidentiality clauses to highlight the disclosures which confidentiality clauses do not prohibit, and making any confidentiality clauses which do not comply with this void in their entirety