UK: New legislation to crack down on misuse of non-disclosure agreements
New legislation aims 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 can 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 are not being made aware of their rights.
Business Minister Kelly Tolhurst yesterday 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.
Furthermore, it will 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.
Ms 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 disclosing a criminal offence, dangers to health and safety, or a failure to comply with a legal obligation. Confidentiality clauses and NDAs can also not prevent an individual from taking a matter to an employment tribunal.
Chief executive of the Equality & Human Rights Commission Rebecca Hilsenrath said: “Harassment and discrimination should never go unanswered and unchallenged just because victims are prevented from speaking out. This new legislation will help to end ambiguity about employees’ rights and stop the misuse of NDAs to protect corporate and personal reputations and obstruct justice.
“The use of NDAs is only part of the problem of workplace harassment and discrimination, and employers must step up to protect their employees from this appalling behaviour before it happens. We are developing new guidance on NDAs and tackling harassment which will provide further clarity for employers and help them create safe and supportive working environments.”