There has been a great deal of publicity around the use of confidentiality agreements (or Non Disclosure Agreements – NDAs) by employers since Harvey Weinstein’s PA Zelda Perkins spoke out about the deal she had signed and when an agency supplying hostesses to the notorious Presidents Club dinner asked them to sign NDAs, though later clarifying that they did not prevent staff reporting criminal behaviour to the police. As a result, campaigners argue that NDAs should be banned and there has been a government consultation on the use of NDAs in settling complaints of discrimination or harassment.
Confidentiality clauses commonly appear in Contracts of Employment and Settlement Agreements. The reality is that most confidentiality agreements are not as restrictive as those signed by Zelda Perkins or the Presidents Club dinner hostesses. There is nothing wrong in an employer seeking to ensure that its confidential information is not misused. When offering a Settlement Agreement, it is usual for the employer to seek to bring an end to the complaint. Employers would be far less likely to offer settlements if they thought the employee would go on to repeat allegations in public. Equally, employers usually do not want employees discussing the amount of voluntary severance pay they have been offered.
Provided that this does not prevent the employee appropriately reporting criminal or unlawful behaviour, this is entirely legitimate. Mutual confidentiality clauses also benefit the employee, as s/he can move on with their life, confident that the circumstances leading to them leaving their job would not become widely known. Like many employment lawyers, we believe that NDAs have their place and should never be banned outright. This would be counterproductive, requiring victims of discrimination to litigate complaints if they are not able to reach a mutually agreeable settlement involving confidentiality on both sides.
It is however important to ensure that confidentiality clauses are fair to the employee, and that they do not prevent appropriate disclosures of criminal or unlawful behaviour, or the employee discussing matters with a medical professional. Confidentiality should be mutual, with an obligation on the employer to say little more than an agreed announcement or reason for leaving. Equally, the employee should be free to discuss matters with their immediate family, and to talk about their reason for leaving (which is especially important in obtaining alternative employment).
Contact Louise Taft for advice on email@example.com or 020 7935 3522 if you have been asked to sign a confidentiality clause in a Contract of Employment or Settlement Agreement.