DO "NON-DISCLOSURE AGREEMENTS" HAVE A FUTURE IN THE WORKPLACE?

Non-disclosure agreements (NDAs) are an important commercial tool

Protecting valuable trade secrets, confidential information and other sensitive information is a commercial consideration for businesses that want to maintain their competitive edge. 

NDAs provide a framework for identifying the information that is protected, what the parties are agreeing to do and the possible consequences if the obligations are breached. The aim is to enable the parties to freely share information for a mutually beneficial outcome or to resolve disputes.

The Employment Rights Bill is set to tackle NDAs

On 07 July 2025, amendments to the Employment Rights Bill were published - the Government announced that it intends to ban NDAs in the workplace, including those in settlement agreements in the case of harassment and discrimination.  The amendment is being driven by the need to stop workers from being silenced and exploited.

What does the new law propose?

Any agreement which prohibits a worker from making an allegation or disclosure relating to harassment or discrimination will be void. This will include settlement agreements and contracts of employment, and will cover both current and former workers.

The new law will cover all types of harassment, including sexual harassment and discrimination under the Equality Act 2010, whether it is from employers or other co-workers. It will have a significant impact on employers who use settlement agreements to resolve disputes on a routine basis.

Given the scope of the proposed changes, the more commercially focused NDAs involving employees will not fall foul of the new law. For example, the onboarding of a senior level employee, in the case of product development, or where business plans and strategies are involved.

It will not be possible to sanction workers for speaking out and they will be able to speak publicly.

Are there hidden consequences?

While the aim is to provide protection to vulnerable workers, has the following been overlooked? 

Employment tribunal hearings are public, which is a factor a business considers when contemplating settlement. A negotiated settlement with a non-disclosure provision has a number of benefits – sensitive information must be kept secret, reputational risks can be managed and a clean break can be achieved as there are controls about what both parties can say about each other.

This new law may increase the number of cases litigated. Our experience shows that employers faced with no confidentiality provisions in an agreement are reluctant to settle; they consider they have got nothing to lose as the dispute will be in the public eye.

Another impact of the new law is that a worker’s negotiating position and/or desire to settle may be compromised as they will no longer be able to offer their confidentiality as part of the deal.

Some choices may have been taken away from both parties.

Time to plan

We will see more news about this proposal for reform in the Autumn. When it becomes law, there will be a significant change to the way in which businesses approach dispute resolution with regard to discrimination and harassment, given that it will be on an open forum from the outset. 

Contracts, settlement agreement templates (which we advise against), or policies that restrict what workers can say or who they can tell will need to be reviewed and amended.

Employers need to be assessing the impact these changes will have on their businesses and creating their plans to adapt.

So, how can FG Solicitors help your business?  

Many employer strive to get it right but recognise that to ensure legal compliance they need some external support.

Our employment team is here to help whether in relation to NDAs or the broader changes under the Employment Rights Bill.

Contact FG Solicitors today on 0808 172 93 22 or complete our quick contact form for a no obligation discussion!

Welcome to a more confident future!

Don’t miss our latest updates! Follow us on LinkedIn.

Click here to explore our commercial, corporate, global immigration and commercial property legal services that could benefit your business. 

This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.