In this article, we look at the government’s proposals around when an NDA can be used; and we explore the practical implications for those advising on or entering into agreements which contain confidentiality provisions.

NDAs are contractual agreements or clauses, often used within a broader agreement, which seek to keep certain information confidential – they are widely used in settlement agreements, COT3 agreements, employment contracts and commercial agreements for a range of legitimate purposes, including the protection of trade secrets and sensitive business information. However, following the #MeToo movement, concerns were raised that NDAs were being used to unfairly silence or ‘gag’ workers from raising complaints about sexual harassment, discrimination and other forms of workplace misconduct.  Since then, the government has come under increased pressure to “ban” NDAs.

The consultation states that the root of the problem is the inherent power imbalance between employers and employees. The government believes that some employers have exploited this to foster a “culture of secrecy”, leaving perpetrators in place in the organisation and preventing workers from accessing support services.

There are already a number of existing legal restrictions, regulatory guidance and best practice recommendations, as well as recent legislative measures restricting NDA usage in place, which we discuss in our previous article.

Proposals

New provisions introduced by the Employment Rights Act 2025 render void any clause in an agreement between an employer and worker to the extent that it prevents the worker from making a disclosure about “relevant harassment and discrimination”, or about the employer's response to such harassment or discrimination (or allegations of harassment and discrimination). However, the provisions allow for regulations to be made which will set out when NDAs will still be considered valid as “excepted agreements”.

What will fall under the new regime?

For harassment or discrimination to be “relevant”, it must meet one of two conditions:

• The misconduct (or alleged misconduct) must have been carried out by the employer or another worker of the employer; or
• The individual subjected to this behaviour (or alleged behaviour) must be the worker who entered into the NDA or their work colleague.

This second limb captures scenarios where a worker is harassed by a third party, for example a client of their employer, provided that the individual subjected to this behaviour (or alleged behaviour) is the worker who signed the NDA or a fellow worker.

The reforms will apply only to NDAs entered into after the provisions are brought into force, and will not apply retrospectively to those already in place.

Is there an outright ban?

In short – no. NDAs will be permitted if they meet specified conditions to remain valid as “excepted agreements”. The rationale behind this is that workers themselves may wish to maintain confidentiality, for example, if they are entering into a settlement agreement to bring closure to a particularly distressing experience.

The consultation proposes the following conditions which must be met to create a valid “excepted agreement”:

• Independent advice: Before entering into an agreement, the worker must have received independent legal advice in writing on the terms, effect and legal limitations of the proposed confidentiality obligations from a relevant independent legal adviser. This replicates the existing requirements for settlement agreements, under which qualified lawyers, fellows of the Institute of Legal Executives employed by a solicitors' practice, authorised officers of independent trade unions, and certified advice centre workers would meet this definition. However, the consultation seeks views on whether ACAS conciliators should qualify as relevant independent legal advisers. The important distinction here is that the advice must be written. The consultation does not propose that employers cover the cost of this independent legal advice.
• Written expression of preference: Once they have received independent advice, the worker must express their preference to enter into an excepted agreement in writing to their employer. The intention behind this is to guard against coercion and ensure that there is informed consent. As to whether employers are permitted to suggest confidentiality, the consultation is seeking views but acknowledges that this suggestion may imply pressure, whilst prohibiting it could prevent workers from being aware of all available options.
• Cooling off period: There is a proposed 14 calendar day cooling off period, during which the worker has the explicit right to withdraw from the excepted agreement without penalty. This is very similar to how NDAs operate in Ireland. As a measure to prevent undue pressure, the government does not propose to allow a worker to waive this cooling off period. The consultation does, however, acknowledge that a cooling off period has complications, particularly if a settlement is reached close to an employment tribunal hearing, as withdrawal could then require the tribunal process to be resumed. The ACAS Code of Practice currently recommends at least 10 days to consider a settlement agreement, and the consultation seeks views on whether a shorter period – 7 or 10 days – may better support settlement.
• Written copy of the agreement: A copy of the NDA must be provided to all parties in an accessible format. In August 2024, the SRA updated its warning notice on NDAs to state that solicitors should not prevent someone who has entered into an NDA from keeping or receiving a copy – the consultation goes further by requiring a written copy as a condition of validity. The consultation also seek views on whether the regulations should require the use of plain language; it proposes to address this through guidance rather than legislation, given the difficulty with defining in legislation what “plain language” is.
• Ban on pre-dispute NDAs: It is proposed that excepted agreements should only be permissible where the harassment or discrimination has already occurred or is alleged to have occurred. This would mean that any NDAs entered into pre-dispute would be unenforceable – for example, confidentiality clauses in an employment contract which seek to prevent workers from speaking out about future incidents of harassment or discrimination.
• Time limited confidentiality: The consultation also invites views on whether confidentiality obligations in excepted agreements should be required to be time limited. This would reflect the approach taken in the Canadian provinces of Ontario and Prince Edward Island, which requires excepted agreements to be “of a set and limited duration”. In Ireland, excepted agreements are permitted to have an unlimited duration unless the employee elects otherwise. The government has raised the possibility of a maximum time limit, listing 1 year, 2-3 years, 4-5 years, 6-10 years and the worker’s choice as potential options. It has not yet proposed this as a requirement and acknowledges the risk of this blunt approach, as some workers may prefer permanent confidentiality.

Permitted disclosures

The consultation proposes that under an excepted agreement, workers should be able to make permitted disclosures to certain individuals and bodies. The proposed list builds upon the existing framework and would include:

• Persons or bodies with law enforcement functions
• Qualified lawyers
• Regulated professionals and tax advisers
• Health and care professionals such as counsellors and voluntary sector services including Independent Sexual Violence Advisors.
• Regulatory bodies such as the SRA, General Medical Council and the EHRC
• ACAS
• Trade union representatives
• Persons authorised to receive information on behalf of any of the above; and
• Close family members

The consultation seeks views on whether this should also be extended to include prospective employers, as NDAs may prevent a worker explaining gaps in work history or the reason for leaving their previous role. The government does acknowledge that a prospective employer would not be bound by the agreement, which could deter employers from entering into such arrangements.

Expansion to include “Other individuals”

As currently drafted, the provisions apply to individuals who meet the definition of a “worker” under the Employment Rights Act 1996. The consultation seeks views on whether the protections should be extended to other categories of individual including agency workers supplied to a host employer, secondment workers, individuals on work experience placements, nurses and midwives in training, certain NHS practitioners operating as self-employed contractors or the wider self-employed.

The consultation acknowledges that other categories of individual may also be vulnerable to misuse of NDAs. This was highlighted by the Women and Equalities Select Committee’s 2024 report, Misogyny in Music, which noted that freelance workers in the music industry are particularly vulnerable given the high proportion of self-employed individuals, giving rise to “significant power imbalances in working relationships and precarious employment practices”. The consultation proposes a staggered approach, starting with workers under the existing statutory framework and extending to other individuals at a later date.

Our key takeaways

• Settlement agreements will require a more structured process: As our previous article set out, there are already multiple legal requirements and best practice recommendations for NDAs in settlement agreements. If implemented, an adviser drafting or advising on a settlement agreement involving harassment or discrimination allegations will need to build additional procedural steps into the process to satisfy the conditions for an excepted agreement, namely:
  • A worker must receive written legal advice before being offered an excepted agreement.
  • The worker must then express their preference in writing to enter into an excepted agreement to their employer.
  • Once executed, there will be a cooling off period.
  • A written and accessible copy of the agreement must be provided to the worker.
  Each of these will present an additional point of challenge or contention for employers, who will need to ensure that they have a robust process in place to document compliance.
• ACAS conciliators may be considered as independent advisers: This raises practical considerations, as ACAS conciliators are intended to be impartial individuals who seek to bridge the gap between parties to reach an amicable solution. Given that the early conciliation period has now been extended and this duty could apply outside it, could this be a practical solution or would it be another task for an already busy service?
• How will this impact COT3 agreements? Currently, COT3 agreements are facilitated by an impartial ACAS conciliator, who provides independent advice to each party, and the conciliator must be satisfied that the parties understand the terms of the agreement. However, there are currently no explicit statutory rules addressing the misuse of confidentiality clauses or NDAs in cases of harassment or discrimination. The government is proposing that all agreements containing an NDA or confidentiality clause relating to harassment or discrimination will be covered by the new regime, meaning that COT3 agreements will now fall within scope. This also raises practical concerns: if ACAS conciliators are not considered independent advisers, a worker would need to take separate legal advice first (at their own cost), which may result in a private settlement agreement being used instead.
• Employers are not required to pay for the initial independent legal advice but many will do so in practice: While the consultation does not mandate that an employer funds this initial independent legal advice, it acknowledges that it is common practice to contribute to legal costs to ensure the validity of a settlement agreement, and this is likely to continue in respect of excepted agreements. The requirement for written advice means potentially higher costs.
• Can employers suggest the possibility of an NDA? This remains an open question under the consultation. The consultation presents this as either being prohibited entirely, or that employers are able to do so with procedural safeguards in place. If employers are not able to suggest the possibility of an NDA then this will require an even more complicated process, as employers would not be able to include an NDA covering harassment or discrimination in any initial draft settlement agreement without this first having been requested by the employee.
• Pre-dispute NDAs relating to harassment or discrimination may be unenforceable: Employers who include blanket confidentiality provisions in their employment contracts to cover future misconduct will need to review and update their standard contract documentation, as these would not qualify as an excepted agreement.
• Late stage settlement issues raised by the cooling off period: The proposed 14 day cooling off period will create challenges, particularly for claims that settle on the eve of or during employment tribunal hearings. If a cooling off period is mandatory and cannot be waived, this creates a real risk that settlements reached close to a hearing date will be undermined by a worker’s subsequent withdrawal and would very likely result in further delay if the tribunal process needs to recommence.
• Disclosures could be permitted to a wide range of individuals/bodies: The proposed list of individuals/bodies that disclosure would be permitted to is extensive and the existence of an excepted agreement will not prevent this. Employers should recognise that confidentiality has the potential to be limited and materially narrower than current arrangements under these proposals. The inclusion of prospective employers would be particularly significant, as this would create a marked devaluation of confidentiality, as a future employer would not be bound by these obligations.
• Scope of “worker” may be expanded for excepted agreements: While it is not strictly a proposal, the consultation has sought views on whether the scope of a “worker” should be expanded and this should be monitored closely, particularly for organisations that engage with individuals outside of the traditional employment relationship – particularly in sectors where there is a high rate of freelance or atypical working arrangements.

The consultation is a significant step in the government's programme to rebalance the employment relationship and address the misuse of NDAs to suppress complaints of workplace harassment and discrimination. However, the proposed framework stops very far short of a “ban”. Our experience in Ireland is that the NDA restrictions have not had an especially major impact there, and that NDA wording remains very standard in settlement agreements.

Nevertheless, for employers and employment law advisers, the GB proposals raise important practical considerations – particularly around the cooling off period and how this will impact employment tribunal litigation, the potential extension of the definition of a worker and the scope of permitted disclosures materially diminishing confidentiality provisions.

The consultation closes on 8 July 2026 and legislation is expected in 2027. In the meantime, employers and advisers should begin assessing the impact of the proposed changes on their current settlement practices and standard contractual documentation.

Consultation on regulations to prevent the misuse of NDAs in cases of workplace harassment or discrimination – available to download here.