At the end of 2018, a report from a committee of the UK parliament called on employers and regulators to take a more proactive role in relation to sexual harassment in the workplace, including in relation to the use of confidentiality (non-disclosure) agreements.
In its recent response to that inquiry, the government has set out its ‘measures to prevent the misuse of confidentiality clauses in situations of workplace harassment or discrimination’. This response, together with the launch of its consultation on tackling the wider issue of sexual harassment in the workplace, reflects the UK’s continued focus on the issue of workplace harassment.
Confidentiality clauses tend to be drafted into contracts of employment and settlement agreements. They are provisions in those contracts which seek to prohibit the disclosure of information. While recognising that confidentiality clauses serve as a useful and legitimate mechanism both during the course of and after employment (for example, to prevent employees from sharing company proprietary information with competitors), the UK government has made it clear that they should not be used to ‘gag’ and intimidate victims of workplace harassment and/or discrimination. The government has confirmed that, when parliamentary time allows, it will provide guidance on drafting requirements for confidentiality clauses and legislate to, in summary:
i. ensure that individuals are not prevented from taking the necessary steps to report a suspected crime to the police, regulated health and care professionals or legal professionals;
ii. ensure that the limitations of a confidentiality clause are clear and specific;
iii. require legal advice on settlement agreements to be given not only on the terms of the agreement but also on both the nature and limitations of confidentiality clauses; and
iv. introduce new enforcement measures for confidentiality clauses that fail to comply with legal requirements. In this regard, it has been suggested that additional compensation will be available to individuals – in certain circumstances – when they bring an employment tribunal claim and it is subsequently found that the requirements for a clear and express confidentiality clause have not been met (although further detail on this is awaited).
Employers need to stay up to date with these reforms and proposals as they will impact the recommended approach to entering into confidentiality agreements during the course of employment and on termination of employment. In addition, we are seeing a trend towards increasing protection for employees in this area, with potential criminal and civil ramifications for employers with regard to sexual offences (be that through being found vicariously liable for acts of harassment carried out by employees or agents, or through action taken against an employer for failure to comply with harassment protections).