NDA’s – A last resort?
We report on the updates to Acas guidance regarding the use of non-disclosure agreements.
Earlier this month, Acas published new guidance on the use of non-disclosure agreements (NDA). The guidance is intended to help both employers and employees understand what an NDA is and when it is appropriate to use one.
An NDA is commonly found in a settlement agreement or COT3 but can also be a standalone document or incorporated in an employment contract.
The use of NDAs has been in the media of late due to high profile cases and this new guidance aims to clear up reasons for using an NDA.
The guidance makes it clear that an NDA cannot stop anybody making a protected disclosure (whistleblowing) or reporting a crime to the police.
An NDA can be relevant to any type of case but should not be used in the following context:
- when they’re not needed;
- to stop someone reporting discrimination, harassment or sexual harassment;
- to cover up inappropriate behaviour or misconduct, particularly if there’s a risk of it happening again;
- to avoid addressing disputes or problems in the workplace; and
- if another solution can be used instead.
Instead of using an NDA, Acas recommends that employers consider alternatives such as relying on procedures and policies that are in place. This could include policies relating to whistleblowing, disciplinary and grievances. A good workplace culture also goes a long way in creating an atmosphere where employees feel that they can speak about issues that they encounter with the knowledge that their concerns would be dealt with appropriately.
Acas recommends that the use of an NDA should be evaluated on a case-by-case basis to determine its suitability and whether any ethical issues arise from potential misuse before proceeding.
If an NDA is used, the language should be plain and easy to understand, and employees should be able to seek legal advice before entering into them. The guidance states that employers should:
- always give a clear explanation of why one is being proposed and what it’s intending to achieve;
- ensure that a worker is given reasonable time to carefully consider it as they may wish to seek trade union or legal advice on its implications;
- think about whether it’s better to address an issue head on rather than try to cover it up; and
- never use NDAs routinely.
If you require further advice about the NDAs or its use, please contact Ian Machray.