207: Government publishes response to Women and Equalities Select Committee report on non-disclosure agreements
The government has published its response to the Women and Equalities Select Committee’s June 2019 report on the use of non-disclosure agreements (NDAs) in workplace harassment and discrimination cases. The Committee had highlighted a number of concerns with the routine use of confidentiality and non-disparagement provisions in settlement agreements, including where they are used to avoid carrying out a full investigation or to prevent disclosure to a new employer or to the police; the emotional and psychological difficulties involved; and the substantial imbalance of power between employers and employees. The Government’s response addresses all of the recommendations and concerns made by the Committee. However, it seems to be mainly a restatement of the Government’s previous response to its own consultation on proposals to prevent the misuse of confidentiality clauses which was published in July 2019.
The response confirms the key recommendations made by the Women and Equalities Select Committee which will be carried forward in new legislation:
- a ban on provisions in NDAs and confidentiality agreements that prevent disclosures to the police, regulated health and care professionals and legal professionals;
- a requirement for limitations in NDAs to be clearly set out in employment contracts and settlement agreements;
- enhanced requirements in relation to independent legal advice for employees signing NDAs to cover any concerns about the reasonableness and enforceability of NDA clauses;
- new enforcement measures for NDAs that do not comply with legal requirements in written statements of employment particulars; and
- new guidance for employers and legal professionals on drafting settlement agreements.
The government has also confirmed that it will consult on introducing a statutory obligation on employers to provide a basic factual reference; that it will give further consideration to requiring employers to investigate all discrimination and harassment complaints regardless of whether a settlement is reached; and that it is investigating the possible adverse effects on individuals of publishing Employment Tribunal judgments online.
It is unclear at present whether and when these proposals will be progressed in legislation. However, the government’s response is a reminder to employers that settlement agreements and confidentiality clauses should be reviewed to ensure that they comply with the expected standards and prevailing good practice.