What a non-disclosure agreement is
An employer might use a non-disclosure agreement (NDA) to stop an employee or worker sharing information.
An NDA can also be known as a ‘confidentiality clause’.
It’s a written agreement and could be:
- in an employment contract
- in an Acas settlement form (‘COT3’), written up when an agreement is reached through ‘conciliation’
- in a settlement agreement
- in a separate, standalone document
This might be when a job starts or ends, or at another stage.
Examples of reasons an employer and employee or worker might agree to an NDA include:
- when someone starts a new job, to protect company secrets
- after a dispute, to keep details confidential
When an employer should not use an NDA
An NDA cannot stop anybody:
- reporting a crime to the police
An NDA should also not be used:
- before seeing if another solution can be used instead
- when they’re not needed
- to stop someone reporting discrimination, harassment or sexual harassment
- to cover up inappropriate behaviour or misconduct, particularly not if there’s a risk of it happening again
- to avoid addressing disputes or problems in the workplace
- to mislead someone
What else the employer can do
Use workplace procedures and policies
It’s a good idea for the employer to follow full and fair procedures to try and resolve any workplace issues, instead of using NDAs.
For example, they should follow workplace procedures such as:
This can help:
- avoid problems getting worse
- avoid legal action
- stop the employer from losing talented employees and workers
- keep employees and workers feeling valued and motivated
- encourage a more open and productive workplace
Create a good workplace culture
If NDAs are used for the wrong reasons, it can create a culture of distrust in the workplace.
Instead of using an NDA, it’s a good idea for employers to:
- encourage an open, inclusive workplace culture
- support employees
Employees and workers should feel they can:
- speak up about any issues
- be confident they’ll be heard
- have their problems addressed in an appropriate way
Training managers to spot early signs of disagreements and resolve issues can help:
- improve workplace productivity
- stop problems getting worse
- avoid legal action
Checking if an NDA is really needed
If an employer is considering using an NDA, they should look carefully on a case-by-case basis to see if:
- it’s definitely needed, for example some issues might be already covered by data protection law (UK GDPR)
- it could cause serious moral or ethical issues
- it’ll cause any other negative outcomes or effects
When an NDA might be used
When an employer and employee or worker make an agreement to resolve a dispute in the workplace, they might use an NDA to keep either of the following confidential:
- the details of an agreement
- the fact that an agreement has been made
Keeping details of an agreement confidential
This is when an employer and employee or worker want to settle an issue and one or both of them want to keep confidential:
- the sum of money agreed in a settlement agreement
- some or all of the other settlement terms
- some or all of the circumstances leading to the settlement agreement
This does not stop someone from saying that an agreement has been made.
Keeping an agreement confidential
This is when someone wants to keep confidential that an agreement has been made.
This might be when only certain people know about the agreement and they do not want others to know.
Other reasons for using an NDA
NDAs might also be used:
- to keep an organisation’s information confidential
- when an employer needs a lot of protection for customer or client identities, intellectual property or other sensitive or important business information
- to keep confidential certain things the employee knows about the workplace or business
- to stop someone making critical or insulting comments, for example about the employer or employee, specific people in the workplace, the service that an employer provides, or their customers and clients
- to help protect someone if the details of a dispute or dismissal became widely known
If the employer has concerns, it’s important to get legal advice before making any further decisions.