Many businesses legitimately use non-disclosure agreements (NDAs) and confidentiality clauses in agreements to protect confidential information. They serve a useful and legitimate purpose in the employment context, as part of both employment contracts and settlement agreements.
The rules around NDAs and confidentiality clauses are however set to be tightened under new legal proposals announced this month by the Department for Business, Energy & Industrial Strategy (BEIS), in an attempt to protect workers from misuse of NDAs. The new proposed legal measures include:
– Legislating that workplace confidentiality agreements cannot be used to prevent people reporting harassment or discrimination to police.
– Measures also include extending the law to ensure the worker agreeing to confidentiality agreements receives independent legal advice on the limitations
Commenting on the proposal, Business Minister Kelly Tolhurst says: “Many businesses use non-disclosure agreements and other confidentiality agreements for legitimate business reasons, such as to protect confidential information. What is completely unacceptable is the misuse of these agreements to silence victims, and there is increasing evidence that this is becoming more widespread.
“Our new proposals will help to tackle this problem by making it clear in law that victims cannot be prevented from speaking to the police or reporting a crime and clarifying their rights.
“They will also help boost understanding of work place rights and legal responsibilities, all part of our plans to create a fairer workplace through our modern Industrial Strategy.”
The aim of the consultation, which closes on 29 April 2019, is for the BEIS to better understand how confidentiality clauses and the legal framework around them work in practice, and to assess what changes are required to ensure individuals are appropriately protected from their misuse. Click here to find out more. Should you wish to respond to the consultation, you can do so here.
Beavis Morgan – Advisers to UK SMEs
At Beavis Morgan, we work with businesses to identify their unique requirements, designing and implementing systems that will provide all the information needed to run and grow a business, through real-time information on actual performance, within a cost effective and efficient framework. We are here to guide you through each stage of the business lifecycle, whilst navigating the challenges and advising on making the right decisions both now and for the future – for you, your family and your businesses.
Click here for more advice and tips for SMEs throughout each lifestage, or contact Steve Govey or your usual Beavis Morgan Partner to find out more about how we can help you and your SME business.
Further reading:
Contract Law – Essential legal documents to protect your business