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There have been enduring worries regarding the application of Non-disclosure agreements (NDAs), especially concerning sexual harassment claims. These worries have intensified alongside the progress of the MeToo movement.
The application of NDAs finds itself at a pivotal juncture. Upcoming and prospective legal reforms are set to significantly change their range and enforceability in cases of discrimination and harassment.
Traditionally, NDAs have been employed as an essential means of preserving corporate secrecy and safeguarding intellectual property and trade secrets. They are commonly utilized throughout the complete employment journey, from recruitment through continuous employment and culminating in an employee’s departure. Nonetheless, considerable legislative modifications are poised to considerably restrict their range.
How are legal modifications reshaping NDAs?
The Government is poised to prohibit the use of contentious NDAs where employees have raised concerns about workplace harassment or discrimination. This initiative is part of the Employment Rights Bill. If enacted, new regulations will render confidentiality clauses in settlement agreements (or other contracts) null and void, to the extent that they seek to inhibit individuals from discussing allegations of or revealing information regarding harassment or discrimination. The regulations also apply to the employer’s response to the claims.
There will be restricted situations where NDAs can still be utilized concerning harassment and discrimination grievances, termed “excepted agreements”. Future guidelines are anticipated to define an “excepted agreement” narrowly, permitting such NDAs only under particular conditions—most notably, when an employee explicitly requests one.
Currently, there is no information about when these NDA propositions will be enacted. Although the Government published a roadmap in July 2025 depicting the phased implementation of the Employment Rights Bill, the NDA proposals emerged after the publication of the roadmap.
The Victims and Prisoners Act 2024
Conversely, under section 17 of the Victims and Prisoners Act 2024 (“the Act”), any NDAs agreed upon on or after 1 October 2025 will be unenforceable against individuals who are, or who reasonably perceive themselves to be, victims of crime – particularly when they divulge information about pertinent actions to specific parties and for clearly delineated purposes.
The Act safeguards “permitted disclosures” made by victims to:
- Law enforcement entities and investigative bodies
- Qualified legal practitioners
- Regulated professionals, including members of the healthcare field
- Registered victim support organizations
- Regulatory or supervisory entities
- Authorized representatives
- Immediate family members, specifically including a victim’s child, parent, or partner.
The Act utilizes an inclusive definition of “victim.” According to section 1, a victim is anyone who has endured harm as a direct outcome of criminal activity in England and Wales, or who reasonably considers themselves a victim. Notably, this definition encompasses individuals who have observed criminal activity and experienced harm as a result.
“Harm” is defined broadly to cover physical, mental, or emotional distress, in addition to financial loss. Significantly, there is no requirement for the crime to have been officially reported, nor must there be any charge or conviction for someone to be acknowledged as a victim under the Act.
What actions should organizations undertake?
· Establish a definitive anti-harassment policy if one is not already in place, and ensure it includes an effective complaint mechanism.
· Provide education to employees and managers on harassment and discrimination.
· Cultivate an inclusive atmosphere within the workplace.
· Reassess contract templates, particularly NDAs, but also employment contracts and settlement agreements to ensure they align with the latest legal standards.
· In addition to the above, and in regard to the new Act, clearly outline the circumstances under which disclosures are allowed in NDAs. This will remove possible ambiguities concerning the rights and responsibilities of the parties involved. By doing so, organizations can maintain transparency and adhere to compliance in a swiftly changing environment.
Conclusion
The introduction of these legislative reforms is yet another step toward prioritizing individual rights over the extensive use of confidentiality clauses. For employers, this signifies adopting a proactive approach to ensure conformity with new transparency-oriented standards.
While NDAs continue to fulfill a legitimate purpose in safeguarding valid business interests, their application in instances of harassment or discrimination is now subject to stricter examination. This examination will be even more rigorous when the NDA provisions in the Employment Rights Bill come into effect.
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