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The Law Society has published guidance confirming that solicitors involved in drafting ‘non-disclosure agreements’ (“NDAs”) within employment settlement agreements (also known as ‘severance agreements’) must take into account the public interest if there is a conflict of principles.

The new guidance entitled “Non-disclosure Agreements and Confidentiality Clauses in an Employment Context” confirms that when drafting settlement agreements solicitors should, when taking instructions from clients and drafting the agreements, consider wider public policy issues of public interest if the agreement intends to prevent an employee from disclosing sensitive information (such as, for example, allegations of sexual harassment).

The publication of the guidance follows the controversy that emerged last year regarding firms of solicitors drafting settlement agreements that prevented the relevant employee from disclosing to third parties that they had been sexually harassed at work. It follows on from SRA guidance published last year warning solicitors about potential breaches of the SRA Code of Conduct that could result from failing to suitably take into account the public interest when drafting settlement agreements.

The Law Society’s guidance reminds solicitors that, when drafting settlement agreements, whether for the firm or for a client, they should consider whether any confidentiality clauses in the agreement are ‘appropriate and lawful’ clauses seeking to protect trade secrets or prevent the details of a dispute being made public or, alternatively, whether it seeks to prevent the employee from disclosing an ‘unlawful act’.

The guidance also confirms that “‘It is unlikely to be legitimate to ask a person to sign a [settlement agreement] in which they agree not to disclose an unlawful act that has not yet happened, as the chances of such an agreement being legally enforceable are slim.”

What is a settlement agreement? Our solicitors explain.

Chris Hadrill, the partner in the employment department at Redmans, commented on the guidance: “Confidentiality clauses in settlement agreements serve an important purpose, in that they essentially ‘put a lid’ on the facts and circumstances of a potential or existing dispute between an employer and an employer. Although this guidance is welcome, the Employment Rights Act 1996 already prevents employers from seeking to ‘gag’ employees from disclosing certain types of behaviour in the workplace to the authorities, to their lawyer, or direct to the employer.”

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

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    I would definitely recommend Redmans. Very impressed with service provided. They were extremely proactive in handling my case which made things easier for me. Provided sound advice and resolution. Special credit for this goes to Chris who dealt with my case with great determination and consideration.

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    Very efficient and friendly

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    A professional and friendly service, which I would highly recommend.

    Posted 3 months ago

    Daniel T

    Extremely helpful and made a bad situation much more manageable. Where other solicitors seemed disinterested in my situation Redmans immediately made me feel like it was a team effort to achieve a more favourable outcome

    Posted 3 months ago

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    Excellent, quick and informative. Chris was a real star and gave me confidence during the uncertainty if a redundancy settlement.

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    Felt in very capable hands was listened to and given excellent advice. Would not hesitate to recomend and use again if needed.

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