Government consultation launched on misuse of workplace confidentiality clauses

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In a bid to remove barriers to the reporting of harassment or discrimination in the workplace, the government is considering measures to prevent the misuse of confidentiality agreements and has published a consultation document on the matter.

At the outset of the consultation, the government has stressed the continuing importance of confidentiality clauses in upholding employment law. In particular, they can be included in contracts to prevent the sharing of trade secrets, for example, or used in settlement agreements to help draw a line under a dispute and allow the parties involved to move on.

Some limits governing the appropriate use confidentiality clauses already exist. For instance, they become void if they aim to prevent an individual from making a protected disclosure, also known as ‘whistleblowing’, or take a case to a tribunal (unless within a COT3 or settlement agreement).

However, in response to occasions where confidentiality clauses have been misused by employers, the government has chosen to address the issue. The consultation, which runs until 29 April 2019, seeks to gather opinions and evidence on the current use of confidentiality clauses, with a view to extending regulation to prevent further misuse. Proposals include:

  • banning confidentiality clauses which prevent a victim reporting potential criminal acts to the police
  • ensuring that confidentiality clauses included in employment contracts also feature in the written statement of particulars of employment issued on the commencement of work
  • requiring all confidentiality clauses to highlight the disclosures which they do not prohibit, and making void in their entirety any that are non-compliant in this regard

There is evidence that, despite existing protections, confidentiality clauses have been misused with the effect that employees have been dissuaded from coming forward to highlight examples of harassment or discrimination. For example, this may have resulted from the terms of a confidentiality clause implying that such occurrences cannot be discussed under any circumstances, contrary to existing case law. Equally, there have been situations in which a clause has incorrectly suggested that the employment rights of an individual do not apply.

The government’s fundamental intention is to ensure that workers retain some rights to make a disclosure even when a confidentiality clause exists and for the limitations of such clauses to be more transparent.

Regarding confidentiality clauses in settlement agreements, the consultation proposes that workers should receive independent advice on specific confidentiality provisions contained within an agreement.

The document also addresses the enforcement of new requirements on the wording of confidentiality clauses. This is intended to encourage employers to ensure that confidentiality clauses are drafted carefully with the intention of avoiding the nature of the dispute becoming public.