The Government has started a consultation on increased regulation of confidentiality clauses in a bid to tackle cases of unethical misuse.
Confidentiality clauses, sometimes called “non-disclosure agreements”, have made headlines in the past few months after several high-profile employers used them to prevent employees who had been sexually harassed or discriminated against from speaking out. The Government now aims to understand more about their use in practice to establish how best to implement new protections.
The consultation contains several proposals to improve regulation of the clauses, including;
- legislating that no confidentiality clause can prevent someone making a disclosure to the police;
- extending the current requirement for a worker to obtain independent legal advice during settlement to include advice on limits of any confidentiality clauses; and
- rendering clauses that do not meet new wording requirements void.
Many confidentiality clauses are used for genuine business reasons such as protecting trade secrets and allowing parties to have a clean break as part of settlement negotiations. However, the Government is seeking to address evidence of misuse by employers such as unreasonably expansive clauses which prevent discussion with anyone including the police, doctors and therapists. The consultation is due to end 29 April 2019.