What is an NDA and why are they in the news?

You may have seen many headlines recently discussing NDAs. The abbreviation stands for Non-Disclosure Agreement. A recent article in the BBC described them as “gagging clauses used to silence allegations of unlawful discrimination and harassment.” NDAs are often included in Settlement Agreements, where an employee is offered a payment on their exit from their role in a business and in return they are asked to keep details of their termination confidential.

This is not always a bad thing. Settlement Agreements are commonplace, and in many cases allow the employment relationship to end amicably. When procedures are followed correctly i.e. both parties have ample time to consider the agreement and get legal advice, settlement agreements can be the best way out of a difficult situation.

So why are NDAs receiving a lot of bad press? There have been complaints in the media of employees being pressured to sign NDAs to cover up serious allegations of sexual harassment as well as alleged incidents of NDAs being used to silence whistle-blowers and prevent even the lawful disclosure of information, such as to the police.

So what is the solution? If you are considering using a Settlement Agreement for an employee, make sure you follow the correct procedures on holding “protected conversations” and offering Settlement Agreements, including allowing ample time for the employee to consider the terms and take advice, and ensuring any NDA-style clauses are reasonable. If you’re an employee who has been offered something which seems like an NDA, please don’t hesitate to seek legal advice.

If you find yourself in either of the situations above, or simply need general advice on NDAs please contact our Employment Team on 0161 926 1508, or follow our employment law-specific Twitter account @HRGuruUK.