This is the first blog in our series ‘simplifying settlement agreements’. In this post, we will tackle settlement agreement confidentitality clauses, clause by clause and give you the essential information in a nutshell. Our solicitor Sacha Carey explains the key aspects of confidentiality clauses and what to look out for.

What is a confidentiality clause?

Settlement agreements will usually contain a confidentiality clause, which has two purposes; firstly, to ensure that the terms of the agreement itself remain confidential and secondly, to limit what you are able to tell others about your employer’s business. You may have heard this confidentiality clause being referred to as a non-disclosure agreement (NDA).

What does a confidentiality clause stop me from saying?

Unless you are required by law to do so, you must not discuss your settlement agreement with anyone else, which includes the circumstances surrounding your departure from the business. You will still be able to speak to a limited number of people, including your immediate family and professional advisers, provided they also agree to keep the information confidential.

You must not use or disclose any trade secrets or confidential information about your employer unless they give you permission, or you are required by law to do so. Your settlement agreement should contain a definition of what your employer classes as confidential information, but this will usually include information about the way in which the business operates including its processes, financial information and information about customers and suppliers.

Whilst this may sound a little overwhelming, this type of confidentiality clause is completely standard. As an employee, you will already owe your employer a duty of confidentiality which will be implied into your employment contract in the absence of any express confidentiality clause. Your settlement agreement will most likely restate any confidentiality provisions contained within your employment contract to make it clear that they survive termination. Your employer may also include new confidentiality restrictions which broaden the scope of the original obligations within your employment contract and require you to sign a statement confirming that you have complied with this clause.

Can I talk to my colleagues about my settlement agreement?

The confidentiality clause will prevent you from speaking to your colleagues about your settlement agreement. You may therefore have concerns about what you can tell them about your reasons for leaving the business as well as what to say to future employers when discussing your employment history. We will address these issues in our next blog post on references and internal announcements.

Your termination payment will be dependent upon your compliance with the confidentiality obligations under this confidentiality clause and therefore it is important to have a good understanding of what information you can or cannot share.

What can my employer say about my departure?

Our simplifying settlement agreements blogs on references and announcements explain.

Want to know more?

If you have been offered a settlement agreement by your employer, we would be happy to guide you through the process. Our team of employment solicitors is highly experienced in advising and negotiating on settlement agreements, providing advice on confidentiality clauses as well as specific expert advice tailored to your particular circumstances. Contact us at info@ergolaw.co.uk or on 0131 618 7007 to ensure that you are well informed and achieve the best possible deal in your circumstances.

You can also find out more about settlement agreements here or take a look at our other blogs in the simplifying settlement agreement series.