New legislation is being proposed in the UK to tackle the misuse of Non-Disclosure Agreements (NDAs), also known as confidentiality clauses, in the workplace – including those being used to cover up sexual harassment, racial discrimination and assault. NDAs may be used by businesses for a number of legitimate reasons but in a minority of cases they are being abused and those that sign them not made aware of their rights.
UK Business Minister Kelly Tolhurst has announced plans for new legislation which will, for the first time, prohibit NDAs being used to prevent individuals from disclosing information to the police, regulated health and care professionals, or legal professionals, such as a doctor, lawyer, or social worker.
The updated legislation will also:
- ensure employers make clear the limitations of a confidentiality clause, in plain English, within a settlement agreement and in a written statement for an employee, so individuals signing them fully understand what they are signing and their rights
- extend current legislation so that individuals signing NDAs will get independent legal advice on the limitations of a confidentiality clause – including making clear that information can still be disclosed to police, regulated health and care professionals, or legal professionals regardless of an NDA
- introduce new enforcement measures to deal with confidentiality clauses that do not comply with legal requirements – for example, an NDA in a settlement agreement that does not follow new legislative requirements will be legally void
Tolhurst said: ”The vast majority of businesses comply with the law and use NDAs legitimately – from protecting commercially sensitive information to preventing information being shared with competitors.
“As we have seen in the news recently, there are a handful of employers using NDAs to cover-up criminal acts in the workplace, including sexual harassment, assault and racist discrimination.
“We will not tolerate the use of NDAs to silence and intimidate victims from speaking out. The new legislation will stamp out misuse, tackle unacceptable workplace cultures, protect individuals and create a level playing field for businesses that comply with the law.”
Currently, confidentiality clauses, or NDAs, cannot prevent an individual from reporting wrongdoing in the public interest, known as making a protected disclosure or ‘whistleblowing’. These could include a criminal offence, danger to health and safety, or failing to comply with a legal obligation. Confidentiality clauses and NDAs can also not prevent an individual from taking a matter to an employment tribunal.