The use of non-disclosure agreements in employment contracts

Nick Denys, policy adviser at the Law Society, discusses the use of non-disclosure agreements and confidentiality clauses. 

Recent high-profile cases, such as the accusations against Harvey Weinstein and the behaviour reported at the Presidents Club dinner, have rightly caused concern as to how Non-Disclosure Agreements (NDA) and confidentiality clauses are used. These controversies have started a debate on how to ensure work environments are safe for all.

In response, the Solicitors Regulation Authority (SRA) has issued a warning notice to clarify how solicitors professional obligations apply when advising on NDAs. The SRA will consider it a breach of the solicitors code if NDAs are used to make improper threats of litigation or are aimed at preventing a victim of harassment from reporting the matter to relevant authorities. The warning notice makes clear that if an employee is not represented then solicitors acting for the organisation will be responsible for ensuring that no abuse of position or unfair advantage is taken. Solicitors will need to ensure that NDAs they approve do not include obviously unenforceable clauses, for example blocking the reporting of criminal acts or anything that falls within the public interest disclosure test.

To support members and their clients, the Law Society will be producing:

• A practice note to assist solicitors on providing advice to their clients on best practice is using and interpreting non-disclosure agreements and confidentiality clauses.
• Plain-English guidance so those who are presented with non-disclosure agreements and confidentiality clauses have a clear understanding of how they function.

Ultimately, the law can only go so far in creating safe workplaces. Workplace culture, which stems from colleague and management behaviour, is normally the most important factor in creating a good workplace. The best way to avoid an intimidating culture from developing is to put in place appropriate policies so everyone is clear as to what is acceptable, what to do if they are concerned about unacceptable behaviour, and to ensure reporting systems are trusted. Good organisations encourage early internal reporting and have in place a reporting policy that clearly states:

• reporting is welcomed
• how the organisation will investigate reports
• those making reports will suffer no detriment.

For many employers creating a safe workplace is a priority, as they know it makes moral and business sense to have an atmosphere where all members of staff are happy to work.