Non-disclosure agreements (NDAs) are legal contracts designed to prevent sensitive or confidential information from being shared with third parties. They bind one or more parties to keep certain information secret. They may form part of employment contracts, settlement agreements on termination of employment or standalone documents. NDAs can be mutual, where both parties agree to keep each other’s information confidential, or unilateral, applying to just one party.
What Makes an NDA Enforceable?
To be enforceable, NDAs must clearly outline what information is protected, for how long, and in what context. They should be written in plain English and proportionate to the risks which they seek to protect.
Agreements that are too broad, vague or unfairly restrict a person’s ability to work are unlikely to be upheld under UK law. Importantly, employees should sign NDAs voluntarily, without pressure and must be given a copy to keep.
NDAs have legal limits. They cannot stop someone from whistleblowing, reporting suspected crimes to the police, seeking advice from professionals such as lawyers or doctors, making disclosures to a regulatory body, or revealing information which is already public or when required to do so by law.
The consequences of breaching an NDA may include repaying any money received under a settlement agreement, an injunction or financial compensation for losses.
Recent Concerns About Misuse
NDAs are not intended to be used by employers to disguise or conceal improper workplace behaviour. However, they have recently attracted negative attention, with some high-profile employers appearing to do exactly that.
Although the NDAs in question may have been unenforceable, the individuals affected would not necessarily have been aware of this. They were often vulnerable, in insecure or low-paid work and would likely have been too frightened to speak up.
Upcoming Changes to the Law
In response, Deputy Prime Minister Angela Rayner has proposed an amendment to the Employment Rights Bill, stating it is “time we stamped this practice out.” The Bill is expected to gain royal assent in Autumn 2025 and come into force in 2026.
Workers would be able to speak out about such allegations freely, without fear of being sued, even if they had signed an NDA. The changes would apply to both current and past employees. The Regulations can be extended to include people such as contractors, volunteers, trainees, and work experience students. They would apply whether the alleged discrimination or harassment was carried out by the employer or by someone else, such as a colleague, and whether the person speaking out was doing so on their behalf or behalf of someone else.
Potential Challenges for Employers
Although this move is widely seen as positive, a potential disadvantage is that employers may become less willing to settle discrimination or harassment claims if they can’t assure an employee will keep matters confidential.
It is also worth noting that the ban on NDAs does not appear to cover an employer’s failure to make reasonable adjustments for employees with disabilities. As a result, an employee could still be asked or expected to stay silent about this.
As a result of these proposed changes, we encourage employers to pre-emptively review their NDAs and confidentiality clauses to ensure that they are being used appropriately, thereby avoiding both legal claims and damage to their reputation for acting unethically.
It is not expected that the new laws will apply to previously signed NDAs. Therefore, employers wishing to maintain protection against employees speaking out against discrimination or harassment claims are advised to settle these claims sooner rather than later.
For further information or assistance with any employment issue, please contact our team on 02920 853731 or email tcms@thomas-carroll.co.uk.
