The Use of Non-Disclosure Agreements in Workplace Complaints

What is an NDA?

An NDA is a type of agreement used to stop an employee or worker sharing information about their job, their employer, or something that happened when they were employed. NDAs are also known as confidentiality agreements. They are often included in settlement agreements that are entered into in circumstances where the employer and employee mutually agree to terminate the employment.

SRA Warning Notice

In 2018, in the wake of the #MeToo campaign, the SRA issued a warning notice on the use of NDAs in workplace complaints. The warning notice reminds practitioners of the key issues and risks associated with using, or advising on the use of, NDAs. It also contains guidance on what the SRA would consider to be inappropriate or improper use of NDAs, which would include seeking to prevent a person from reporting misconduct or a regulatory breach, making a protected disclosure, reporting an offence to a law enforcement agency, or co-operating with a criminal investigation.   Solicitors must act consistently with the warning notice in the advice they give their clients.

Review

The SRA has conducted a new review of the use of NDAs in workplace complaints. One of the focuses of the review was on how firms negotiate and draft settlement agreements on behalf of clients. Whilst the review found that most NDAs complied with the warning notice, the question of how NDAs are used in an employment context has become an areas of increasing focus in recent years, as concerns have grown that NDAs are being used to exploit the power balance between employers and staff. Elsewhere, the Legal Services Board has also recently closed its call for evidence on the misuse of NDAs and we await its response.

Using NDAs in Settlement Agreements

It remains usual practice for confidentiality clauses to be included in settlement agreements. An employer's sensitive information should normally be kept confidential, as well as the facts and terms of a settlement agreement. However, where there has been an allegation of wrongdoing such as harassment or a criminal act, an NDA must not prevent an employee from; referring matters to an appropriate regulator, cooperating with any criminal proceedings, or making a protected whistleblowing disclosure.  It is important to consider the circumstances and tailor standard confidentiality provisions where appropriate. 

For more information on the use of non-disclosure agreements please contact Alice Reeve in our Employment team on 0117 314 5383, or complete the form below.