Exploring the limitations of NDAs

In written evidence to the Women and Equalities Select Committee, the CBI recommended the introduction of a code of practice for non-disclosure agreements (NDAs). In response, the government has announced a consultation to explore how to enhance awareness of the limitations of NDAs and how to introduce a code of practice.

The government said:

“The Government recognises the Committee’s concern over the unethical use of nondisclosure agreements (NDAs). In its evidence to the Committee, the Government highlighted the existing statutory rights that workers retain, even when they have signed an NDA. However, we agree that individual workers may not be aware of these rights, and so can be intimidated in pursuing claims of sexual harassment even where the NDA is unenforceable.

The Government therefore agrees with the Committee that NDAs require better regulation and a clearer explanation of the rights that a worker cannot abrogate by signing one. Particularly that workers have the right to make a public interest disclosure and to take a matter to an Employment Tribunal (unless this has been specifically waived by a valid settlement agreement). The Government also agrees that any explanation to workers must be clear. We will consult on the best way to achieve this, including the Committee’s recommendation of a standard approved confidentiality clause.

As part of this consultation, the Government will consider how best to enforce such a requirement. The Government believes that making it a criminal offence to propose an NDA that is unenforceable, as the Committee recommends, could be difficult to enforce. However, the Government will likewise consider and consult on enforcement approaches.”