Further key reforms to NDAs
Further key reforms to NDAs
The Employment Rights Bill now includes further reforms to non-disclosure agreements (NDAs). How might they impact your agreements?
NDA ban. In yr.27, iss.14, pg.6, we reported on reforms to NDAs that will come into force on 1 October 2025 (see Further information). NDAs include confidentiality clauses in settlement agreements and employment contracts. The government is now going further and has amended the Employment Rights Bill to effectively ban employers from using NDAs to silence workplace harassment or discrimination.
Extent of ban. The new section will amend the Employment Rights Act 1996 to provide that any provision in an NDA is void insofar as it seeks to prevent a worker from making: (1) an allegation or disclosure of information about harassment or discrimination (within the meaning of the Equality Act 2010); or (2) an allegation or disclosure about the employer's response to the harassment or discrimination or its response to the making of the allegation or disclosure. There's power for regulations to be made on "accepted agreements" where the ban won't apply.
Implications. These provisions are wide, e.g. they aren't limited to sexual harassment or specific types of discrimination (although they don't cover allegations of a failure to make reasonable adjustments for disabled workers), and they apply whether the harassment or discrimination is carried out by the employer or a fellow worker, or whether the victim is the worker themselves or a fellow worker. Not only will confidentiality clauses need amending when these provisions come into force, but also they will have a major effect on the settlement of harassment or discrimination allegations. Employers may be less willing to settle allegations if they can't require confidentiality, leading to more employment tribunal claims.
Tip. You will still be able to use confidentiality clauses to protect your sensitive business information and trade secrets. These provisions will only void that part of the clause that seeks to prevent allegations or disclosures related to harassment or discrimination.
NDAs will be void if they seek to prevent a worker speaking out about an allegation of harassment or discrimination, or about the employer's response. These provisions will have a major effect on the settlement of such allegations.