One question facing employers trying to resolve employment claims, and indeed general civil claims, is “should we include a non disclosure (“NDA”) or confidentiality clause in our settlement agreement”?

What are NDA’s?

A non disclosure clause of often used in settlement agreements, the main purpose of which is to prevent the parties disclosing the circumstances in which the employment was terminated.

They typically prevent staff and ex-staff making information about the reasons surrounding a person’s departure public.

They are controversial when used to silence potential whistleblowers, or in situations where allegations have been raised relating to sex discrimination, race discrimination or discrimination against any other protected groups.

This has become a difficult area in recent years as former employees have signed confidentiality agreements preventing them even disclosing the existence of the agreements, let alone what they suffered at the hands of powerful people. Individuals have used them to silence people who could speak-out about alleged misconduct.
NDAs are still widely used across many industries. Despite the NHS banning the use of NDA’s since 2013, they still appear to be being used. The health secretary has said that he wants more people to feel they could “put their head above the parapet”, and described settlement agreements that infringed on people’s rights to voice concerns as “completely inappropriate”.

Case study

A radiographer who blew the whistle on NHS malpractice has challenged the NDA she was asked to sign. In 2012, Sue Allison reported a string of missed cancer diagnoses and wider concerns about standards of care in a breast screening unit at Morecambe Bay NHS Foundation Trust. She claimed that she and a colleague were ostracised and subjected to extensive bullying, eventually leading them to file formal grievance complaints against the trust. In 2015, Mrs Allison claims she was pressurised into signing an NDA without legal advice, preventing her from publicly airing her concerns or bringing future claims against the trust. Mrs Allison claims she did not fully understand what she was agreeing to, arguing she was “pretty much conned into signing” the NDA. In April 2019 Mrs Allison successfully argued before the tribunal that the NDA should not prevent her proceeding to a full tribunal hearing, so to that extent it was ineffective.

Consultation

The government issued a consultation on the subject of regulating NDA’s which closed in April. The suggestions include:

1. Legislating that confidentiality clauses cannot prevent any disclosure to the police
2. Requiring a clear description of the limits of confidentiality provisions within a written statement
3. Ensuring a worker signing a settlement agreement receives specific independent advice on the limits of the confidentiality clauses
4. Any confidentiality clause in a settlement agreement that does not meet new wording requirements is made void in its entirety

Employers should be careful about putting forward NDA’s in order to hide wrongful or illegal activities such as sexual assault, harassment or discrimination. Too wide or unintelligible a clause might render it unenforceable and a solicitor could be at risk of breaching the SRA Code of Conduct (through taking unfair advantage of their client’s opponent). Likewise it might amount to a breach of the Mediator’s Code of Conduct.

Clearly, it is better to tackle discrimination, harassment and bullying before it leads to a tribunal claim. Early intervention by way of workplace mediation not only allows the parties to resolve their dispute at an early stage, it allows the employer to reevaluate workplace practices in conjunction with current employees to assess whether there have to be fundamental changes to the workplace to reflect best practice.

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