Reforming NDAs in harassment and discrimination cases: an uneasy compromise?

The Government has launched a consultation on proposed reforms to the use of non‑disclosure agreements (NDAs) in cases involving allegations of harassment or discrimination. The stated policy objective is a familiar one: to prevent the “misuse” of confidentiality clauses to silence victims and to ensure greater transparency in how workplace wrongdoing is addressed.

To recap, under the Employment Rights Act 2025, a confidentiality clause (whether in a settlement agreement, employment contract or other document) will be void insofar as it tries to prohibit a worker from disclosing information about discrimination or harassment by their employer or a colleague, or discrimination or harassment which they or a colleague have suffered, or any allegations relating to such harassment or discrimination or their employer's response to it.   However, such provisions in “excepted agreements” will not be void. 

Excepted agreements

The current consultation finally provides some detail about what an “excepted agreement” will look like.  There will be a detailed set of prescribed conditions. In practice, these would significantly elongate and complicate the settlement process in precisely the cases that are already the most sensitive and time‑pressured.

A health warning at the outset: these are proposals, not settled law, and they may well change. But they give a clear indication of the Government’s current direction of travel.

The proposed conditions for an “excepted agreement”

The consultation proposes a cumulative list of conditions that must be satisfied before confidentiality provisions relating to harassment or discrimination will be enforceable.

Independent advice on confidentiality terms

First, the worker must have received advice, in writing, from an independent adviser specifically on the effect and limitations of the confidentiality terms in the agreement.

This goes beyond the existing statutory requirement for advice on the terms and effect of a settlement agreement as a whole. The consultation suggests that the Government may permit ACAS conciliators to provide this advice in relation to COT3 agreements, which would be a pragmatic move — but only if accompanied by appropriate training and, realistically, additional funding.

Without that, the pressure on already‑stretched ACAS resources is obvious.

For settlement agreements entered into outside ACAS conciliation, the requirements will mirror those for a waiver of statutory employment claims to be enforceable  i.e. the advice must be from an independent legal adviser or a suitably qualified trade union official or advice centre worker. 

A written confirmation of preference

Secondly, once that advice has been received, the worker must confirm in writing that it is their preference to enter into the agreement.

This introduces an additional documentary step into the process. It also raises questions as to how “preference” will be evidenced in practice and what scope there may be for later arguments that the confirmation was not genuinely informed or voluntary - e.g. if the advice was negligent, will this prevent the agreement being an “excepted agreement”?   

A 14‑day cooling‑off period

Thirdly, there will be a mandatory 14‑day cooling‑off period after the agreement has been entered into, although the consultation floats the possibility of allowing this to be waived.

The consultation acknowledges the potential complexity of the interaction with Employment Tribunal limitation periods and the ACAS early conciliation timetable. Anyone who has settled claims just before a limitation period expires —  or at the doors of the Employment Tribunal — can already see the practical difficulties.  Adding a post‑signature cooling‑off period into that mix does little to simplify matters.

Accessible format requirements

Fourthly, the worker must be given a copy of the agreement in an accessible format.

As a principle, this is uncontroversial. As a drafting and compliance obligation, it introduces another point on which agreements may later be challenged, particularly where accessibility needs are not obvious or have not been raised during negotiations.

Scope limited to past acts

Confidentiality clauses in excepted agreement may only apply to alleged harassment or discrimination that has already taken place.

However, we think this could leave scope for disputes - for example, where an ex-employee makes a disclosure about ongoing harassment which is linked to events during their own employment. 

A potential time limit on confidentiality

The consultation also contemplates (but does not firmly propose) a maximum time limit on confidentiality obligations.  Although time-limited confidentiality clauses are quite common on commercial NDAs, employment confidentiality obligations tend to be unlimited in time.  The consultation moots options ranging from 1 year to 10 years, or no limit at all.  A short limit could well affect the value employers place on confidentiality as part of the overall settlement package.

Permitted disclosures to a wider group

Separately, the consultation proposes an expanded list of persons to whom disclosure may be made, including trade union officials and close family members.

Again, this reflects a policy choice, but it further narrows the practical reach of confidentiality provisions and increases the risk of onward disclosure beyond the parties’ control.

Who pays for the advice?

One notable omission in the consultation is any proposal to require employers to contribute to the cost of advice on confidentiality terms in statutory settlement agreements.

Given that the advice is being mandated by statute for policy reasons, and that the proposals will inevitably increase the time and complexity of negotiations, this feels like a missed opportunity. In practice, it creates a real risk that the additional cost burden falls disproportionately on employees — or that employers end up paying more indirectly simply to get deals over the line.

Either way, this is likely to increase friction, rather than improve outcomes.

The cooling‑off period: solving the wrong problem?

The benefit of a proposed cooling‑off period is also open to question.  If a worker has already been required to obtain independent advice and to confirm in writing that they wish to enter into the agreement, it is not obvious what additional protection a mandatory post‑signature cooling‑off period provides. In many cases, it may simply prolong uncertainty for both sides without providing meaningful protection. 

A longer process, not a different one

Stepping back, the central concern with these proposals is that they focus heavily on process rather than substance.

If the policy intention is genuinely to ensure that allegations of harassment and discrimination are not swept under the carpet, these reforms do not — at least as currently framed — require any fundamental changes to the scope of confidentiality clauses themselves. What they do introduce is a longer, more complex and more expensive process for getting to an agreement.

That increased cost will be borne by both parties, but there is a real risk that employees shoulder a greater share of it in practice.

Without wishing to diminish the efforts of those who have campaigned for reform in this area, this set of proposals feels less like a clean legislative fix and more like a rather messy compromise. Employers will need to prepare for more protracted negotiations and greater technical risk, while employees may find the path to settlement no clearer — or cheaper — than before.