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13 November 2019
The Equality and Human Rights Commission (EHRC) recently published new guidance on the use of confidentiality agreements in discrimination, harassment and victimisation cases. This guidance covers both legal obligations and suggested good practice.
Confidentiality clauses or non-disclosure agreements (NDAs) have become a topic of significant interest because of how they can be used to prevent employees from reporting allegations of sexual harassment or other similar misconduct.
The government recently published its response to a consultation on the regulation of confidentiality clauses, which sets out a number of proposals for new legislation in this area (for further details please see "Response published to consultation on misuse of confidentiality clauses").
This consultation took place against the background of various other interventions and proposals in this area, including an EHRC report on sexual harassment at work and a Women and Equalities Committee report on sexual harassment in the workplace, which called for NDAs to be better controlled and regulated (for further details please see "Workplace sexual harassment – Women and Equalities Committee urges radical reform"). In addition, the EHRC is expected to publish wider guidance on tackling sexual harassment later in 2019.
The new EHRC guidance provides a significant steer on both the current law and good practice for both employers and workers. The introduction clarifies that it is concerned only with confidentiality agreements that could prevent a worker from speaking about any act of discrimination, harassment or victimisation which contravenes the Equality Act.
Confidentiality agreements in terms and conditions of employment
The guidance recognises that employers can legitimately seek to stop a worker discussing or using confidential information outside of work, either during their employment or after their employment has ended. However, there are legal limits on this. The good practice guidance is as follows:
Resolving disputes with workers
Confidentiality agreements which stop workers discussing acts of discrimination are commonly included in settlement agreements and Advisory, Conciliation and Arbitration Service conciliated agreements. This will be unlawful in some cases, but in any event the EHRC's good practice guidance is as follows:
Unlawful confidentiality agreements
The guidance also covers the types of confidentiality agreement which cannot be enforced. These include those which prevent protected disclosures under whistleblowing laws, the discussion of criminal activity or activities required by law, such as giving evidence or making a report to a regulator. According to the good practice guidance, it should be clear to a worker from a settlement agreement's wording that it does not stop them from doing these things.
It is surprising that the EHRC has chosen to publish this guidance now, with draft legislation to implement the government's recent proposals forthcoming. The guidance covers only the current law, so will be out of date as soon as any new laws are published on matters such as to whom disclosures can be made and what wording must be included in confidentiality clauses.
This document is nonetheless likely to have a significant effect on discussions between employers and workers about confidentiality agreements, particularly as part of a settlement agreement. Much of the EHRC's good practice guidance goes further than the law requires but can still be used in negotiations between parties.
Overall, the guidance takes the approach that the use of NDAs when resolving disputes should be the exception rather than the norm, with workers being given both time and money to consider whether they are willing to agree. This is quite a shift from the current practice of many employers that present settlement agreements with a standard, template confidentiality clause – often required to be signed within a short timeframe – and make a minimal contribution towards legal fees.
The good practice guidance is not legally binding but will undoubtedly be used by workers and their advisers to question the use of broad confidentiality clauses in agreements that settle discrimination claims. It remains to be seen how this will intersect with any forthcoming legislation.
For further information on this topic please contact Lucy Lewis at Lewis Silkin by telephone (+44 20 7074 8000) or email (firstname.lastname@example.org). The Lewis Silkin website can be accessed at www.lewissilkin.com.
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