NDA clauses in a settlement agreement, explained

Most settlement agreements include a confidentiality clause. Sometimes called an NDA. They're lawful and common, but they shouldn't be used to silence you about wrongdoing.

What does an NDA clause usually cover?

Typically, a confidentiality clause covers the existence and terms of the settlement agreement itself, and often the circumstances of your exit more broadly. It exists so both sides can move on without the details becoming public or being discussed with colleagues, competitors or the press.

What should a lawful NDA not do?

Following scrutiny of NDA misuse in cases involving harassment and discrimination, there's now clear expectation that a properly drafted confidentiality clause should not:

• Stop you reporting a criminal offence to the police
• Stop you making a protected disclosure (whistleblowing) to a relevant regulator
• Stop you cooperating with a regulator or legal investigation
• Stop you discussing your experience with close family, a solicitor, a therapist or other healthcare professional, as needed for your own wellbeing or advice

If your agreement's wording seems to sweep more broadly than this, that's exactly the kind of thing an independent solicitor should flag and, where appropriate, push back on before you sign.

What can you still do with a standard NDA in place?

• Tell close family and your solicitor. Standard clauses almost always carve this out
• Confirm you left the company and, usually, your job title and dates. Basic facts aren't typically restricted
• Report genuine wrongdoing through the proper channels, regardless of what the clause implies

What can happen if you breach an NDA?

If you breach a lawful confidentiality clause. For example, discussing the settlement publicly when the clause doesn't allow it. Your employer could bring a claim for breach of contract. This is another reason to understand exactly what your clause says, rather than assume, before you say anything about your exit.

Not sure what your confidentiality clause actually allows? Send us your agreement and an independent solicitor can check the wording with you.

Wherever you are in the process, Settlement Agreement Guide's free service is here to help.