As we pointed out in a recent article, when drafted correctly, confidentiality clauses that are contained in settlement agreements are designed to be mutually beneficial for both employer and employee in terms of protecting both of their legitimate interests. Any such clause which attempts to "gag" an employee from speaking out in the public interest, such as in relation to discrimination and harassment in the workplace, would be void and unenforceable anyway. That is because such a disclosure would amount to a protected disclosure (i.e. whistleblowing) under the Public Interest Disclosure Act (PIDA) 1998 (as amended by the Enterprise and Regulatory Reform Act 2013). The right to make protected disclosures overrides confidentiality clauses contained in any settlement agreement that attempts to constrain/restrict that right, thereby rendering that part of the confidentiality clauses as void and unenforceable.
Confidentiality Clauses: Select Committee Hears Evidence
The Women and Equalities Select Committee has been hearing evidence into the use of non-disclosure agreements (NDA's), including the use of confidentiality clauses in settlement agreements. One of those giving evidence was Baroness Helena Kennedy who stated: "My concern is that, yes, we have seen a huge growth [in the use of confidentiality clauses]. I do think that women do not want to see a ban. One of the things I was concerned about was that I was hearing talk among colleagues in Parliament and in the legal profession about, “Couldn’t you have a ban?” I think it becomes problematic because so many women themselves would prefer to deal with it this way. I [also] think that we should be making it clear that there is a place for [confidentiality clauses] appropriately protecting intellectual property, protecting trading secrets and all of that."
The deadline for providing responses to the Inquiry into confidentiality clauses has been extended until the 31st January 2019.
Enhancing The Safeguards
The solution to the issue of the use of confidentiality clauses lies in enhancing the protections already afforded by the whistleblowing legislation. The Government needs to legislate further to properly set out what the limits are in terms of confidentiality clauses, and it should be made mandatory to include a clause within the settlement agreement itself confirming what those limits are. That way the parties to the settlement agreement are aware of the limits, and what it is they are signing up to.
