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Non-disclosure agreements and confidentiality clauses in an employment law context

7 January 2019

There are often legitimate reasons why parties want to enter into confidentiality arrangements. Confidentiality clauses, which may include terms commonly referred to as non-disclosure agreements, within settlement agreements are used to stop commercial information from being shared inappropriately and to avoid reputational damage.

This practice note is concerned with the use of confidentiality provisions that have been drafted as part of an agreement to end a workplace relationship.

This practice note focuses on situations in which confidentiality provisions are aimed at preventing disclosure of conduct or other circumstances which, for example, may have led to a dispute or to the breakdown of the relationship between an individual and the business for which they work.

Legal status

This practice note expresses the Law Society’s view of good practice in this area. It is not legal advice.

Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society’s view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors may follow. You are not obliged to follow them, but doing so may make it easier to account to oversight bodies for your actions.

Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.

For queries or comments on this Practice Note contact the Law Society’s Practice Advice Service.

Professional conduct

This practice note references both the current SRA Handbook (outcomes and indicative behaviours) and new SRA Handbook (standards):

  • Outcome (10.3): you notify the SRA promptly of…serious failure to comply with or achieve the Principles, rules, outcomes and other requirements of the Handbook
  • Outcome (10.4): you report to the SRA promptly, serious misconduct by any person or firm authorised by the SRA, or any employee, manager or owner of any such firm
  • Outcome (10.7): you do not attempt to prevent anyone from providing information to the SRA or the Legal Ombudsman
  • Outcome (11.1): you do not take unfair advantage of third parties in either your professional or personal capacity
  • Indicative behaviour (10.11): cites, by way of example, entering into an agreement which would attempt to preclude us from investigating any actual or potential complaint or allegation of professional misconduct
  • Indicative behaviour (11.7): you do not to take unfair advantage of an opposing party’s lack of legal knowledge where they have not instructed a lawyer

SRA Principles

There are 10 mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Handbook.

The principles apply to solicitors or managers of authorised bodies who are practising from an office outside the UK. They also apply if you are a lawyer-controlled body practising from an office outside the UK.

When drafting a non-disclosure agreement and/or confidentiality clauses in an employment law context, you should consider:

  • Principle 1: uphold the rule of law and the proper administration of justice
  • Principle 2: act with integrity
  • Principle 3: act independently
  • Principle 6: behave in a way that maintains the trust the public places in you and in the provision of legal services
  • Principle 7: comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open, timely and co-operative manner
  • Principle 8: run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles

Terminology

Must - A specific requirement in legislation or of a principle, rule, outcome or other mandatory provision in the SRA Handbook. You must comply, unless there are specific exemptions or defences provided for in relevant legislation or the SRA Handbook.

Should - Outside of a regulatory context, good practice for most situations in the Law Society’s view. In the case of the SRA Handbook, an indicative behaviour or other non-mandatory provision (such as may be set out in notes or guidance).

These may not be the only means of complying with legislative or regulatory requirements and there may be situations where the suggested route is not the best possible route to meet the needs of your client. However, if you do not follow the suggested route, you should be able to justify to oversight bodies why the alternative approach you have taken is appropriate, either for your practice, or in the particular retainer.

May - A non-exhaustive list of options for meeting your obligations or running your practice. Which option you choose is determined by the profile of the individual practice, client or retainer. You may be required to justify why this was an appropriate option to oversight bodies.

SRA Code - SRA Code of Conduct 2011

O - Outcome

IB - Indicative behaviour

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