Get Ahead of the Legal Changes to Confidentiality Clauses

The government consultation “Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination” is looking closely at how non-disclosure agreements (NDAs) work in business. It is set to run until Monday 29 April 2019 so what can employers do now to prepare?

This consultation is part of the government’s drive to create “a fairer workplace as part of the modern Industrial Strategy”. The Business Minister, Kelly Tolhurst, announced that there will be new legal proposals aiming to tighten the law in the use of NDAs. 

The new law will not prevent the use of NDAs, nor will it prevent businesses from including confidentiality clauses in settlement agreements and other documents to obstruct the disclosure of confidential information, for example, trade secrets or business strategies. 

The new proposals are in response to a small minority of employers who attempt to silence whistleblowers and intimidate employees who have been subject to discrimination and harassment, including sexual assault and physical threats and attacks. The recent revelations involving Sir Philip Green (Arcadia) and Ray Kelvin (Ted Baker), not forgetting Harvey Weinstein, appears to indicate that the problem lies with senior staff attempting to take advantage of those who are junior and less powerful. In order not to be caught by the new law businesses must ensure that their HR departments address the issues of discrimination and harassment with absolute clarity and undertake investigations with root and branch thoroughness and remain impartial regardless of the seniority of the individuals involved. It will no longer be acceptable to take the Ted Baker HR approach of telling aggrieved employees “that’s just how he (Ray Kelvin) is”. Conversely, senior employees must be protected from spurious claims and it is possible that guidelines will have to be developed to ensure that the workplace environment limits the opportunity for accusations to be made and ensures that it does not inadvertently facilitate inappropriate behaviour.

 Strategies and policies will inevitably have to evolve aimed and protecting staff and the business, for example:

• A ban on late night working in an empty office
• Moderate Christmas parties, held during working hours
• Over-night off-site travel always to be carefully managed and where possible to include at least three people
• No meetings held in hotel rooms during off-site client visits
• A “hands-off” and “no banter” clauses in contracts to avoid misconceptions and unintentional offences
• Middle managers to have a pastoral role in monitoring junior staff
• Employees to be regularly reviewed, with a watchful eye on those who fall into “minority or vulnerable” categories, such as the disabled, LGBT, women and ethnic minorities, to ensure that should there be a risky situation developing it can be nipped in the bud
• Providing a clear written description of rights before confidentiality clauses in employment contracts or settlement agreements are signed
• Possibly providing independent legal advice before an employee signs a settlement agreement

An individual’s right to report crimes, harassment or discrimination to police that arise in the workplace will no longer be able to be bound by an unethical NDA that seeks to silence them. Nor will they be able to be duped into signing whistleblowing gagging orders because they are unaware that there is no provision that can remove an individual’s rights to report in respect of whistleblowing. 

The astute business will anticipate the new law and go further than its provisions to demonstrate its ethical principles.

For further information about the new proposals please click here.