Financial & Legal News

Non Disclosure – the facts behind the headlines

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Non-disclosure agreements have been in the news recently after claims that they have become mere gagging orders for undesirable workplace practices.

They were initially designed to prevent staff sharing trade secrets if they changed jobs and form part of an initial contract of employment, or even a stand-alone contract on termination of employment for example when employees and organisations come to a settlement agreement - without going to a full tribunal hearing.

They are often described as "confidentiality clauses", but more commonly as NDAs.

But the claim is that NDAs have also been used to prevent employees discussing allegations of misbehaviour in the workplace after a settlement has been agreed.

How are NDA’s enforced?

“The news today highlights the significance of NDA, the incidences in when they apply and also the ramifications of what can happen if they are broken,” said Head of Employment Susan Mayall. “If someone breaches an NDA, they break a contract, leaving them open to legal action,” she warned.

Since the #MeToo movement has gained the attention of employers and employees NDA’s have been under the microscope.

When used correctly and everyone is fully aware of what is being signed an NDA can provide value and protection to both the boss and the employee,” added Susan.

Employers and employees may not want to disclose information when terminating contractual agreements. Sometimes by mutual agreement ending a job early may be the best thing for both parties and the NDA prevents the employee having such information on their employment record.

Similarly, employers don’t always want it to be known that a payment has been made in return for early termination of an employment contract, as this could encourage other employees hoping to make a financial gain.

“When the appropriate polices are in place, employment contracts properly issued and good working practices in place, these problems are negated,” said Susan.

For advice on employment law, settlement agreements and any other employment law matter please contact Susan Mayall on 0161 785 3500

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

Written by Susan Mayall


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