Related Articles
New consultation on NDAs in harassment and discrimination cases – time to speak out?
Summary
What is happening? The Government has recently commenced a consultation on new regulations purporting to ban the use of non-disclosure agreements (NDAs) in workplace harassment or discrimination contexts. It will consult on the exceptions to this general ban and how those exceptions might look like.
When will this happen? The consultation is open until 8 July 2026, and the new regulations are anticipated to come into force in 2027.
Who should take note? The consultation and the new regulations will be of particular interest to HR leaders, in-house counsel and senior management teams who regularly handle sensitive workplace complaints and settlements.
Background
When the regulations come into force at some point in 2027, any provision in an agreement between an employer and a worker that prevents the worker from making allegations or disclosures about relevant harassment or discrimination, or about the employer’s response to such allegations, will be void. Relevant harassment and discrimination include direct and indirect discrimination, disability and reasonable adjustments discrimination, gender reassignment discrimination, pregnancy and maternity discrimination and harassment (including sexual harassment) and will apply to circumstances where a worker is harassed by a third party, such as an employer’s client.
The only exception will be where the NDA qualifies as an “excepted agreement” that complies with conditions to be set out in those regulations.
The consultation therefore focuses on two core questions: what conditions an NDA must satisfy to be enforceable as an excepted agreement, and to whom workers must be allowed to make “permitted disclosures” about past conduct despite signing an NDA.
It will also explore whether the protection should extend beyond statutory “workers” to other categories of individuals, such as agency workers, secondees, interns and the self-employed; an aspect of the consultation organisations with significant numbers of contingent workers, interns or self-employed contractors should be specifically mindful of.
What is the Government consulting on? Key proposals for “excepted agreements”
The Government proposes several safeguards that NDAs must comply with if they are to remain enforceable in harassment and discrimination cases.
First, before entering into an excepted agreement, the worker would be required to receive written advice from a relevant independent adviser, such as a solicitor or another recognised professional. That advice would need to explain the terms of the NDA, its effect and, critically, its legal limits, including the disclosures that cannot lawfully be restricted.
Secondly, after receiving that independent advice, the worker would have to confirm in writing to their employer that they wish to enter the NDA. This is intended to demonstrate that the worker’s consent is informed and voluntary, rather than the product of pressure or misunderstanding.
Thirdly, the consultation proposes a mandatory 14 day cooling-off period during which the worker could withdraw from the NDA or the entire agreement which includes the NDA (such as a settlement agreement) without penalty. The Government is actively seeking views on whether 14 days is the appropriate length for such a period and whether, and in what circumstances, the cooling-off period could be shortened or waived at the worker’s request.
The proposals also emphasise transparency and accessibility. The NDA would need to be documented in writing, with a copy provided to all parties in an accessible format. The Government is considering whether to go further and require NDAs in these contexts to be drafted in plain English language. In practice, this is likely to increase pressure on employers to avoid overly complex, legalistic or opaque confidentiality clauses.
Disclosures that cannot be restricted
Even where an NDA satisfies all the requirements to be an excepted agreement, certain disclosures will remain unrestricted. Workers will still be free, for example, to make “protected disclosures” under the whistleblowing framework, speak to their lawyers and healthcare professionals and report crimes to the police or other law enforcement bodies as is currently the case.
In addition, the consultation proposes that workers should be able to make disclosures about relevant harassment or discrimination to trade union representatives, authorised intermediaries and close family members for the purpose of receiving support. “Close family members” is proposed to include close relatives (i.e. a siblings, grandparents, aunts or uncles, whether of the full blood or half blood or by marriage or civil partnership), children, parents or partners (which would include married partners, civil partnerships and intimate personal relationships which are of significant duration).
The Government is also exploring whether workers should be able to make permitted disclosures to prospective employers, particularly where they are asked about why they left a previous role or about any prior complaints. This could significantly limit the extent to which NDAs can be used to influence what workers say in the context of recruitment processes without any guarantee that a prospective employer or recruiter would keep the information confidential.
Practical implications for organisations
Although detailed regulations are not drafted, it is clear that the proposed regime will substantially limit the scope and effect of NDAs in harassment and discrimination cases and expose employers to greater scrutiny over their use.
Employers are likely to see a reduction in the ability to rely on NDAs as a tool for managing reputational risk, as individuals will retain rights to disclose matters to an array of third parties and may ultimately be able to talk to prospective employers or recruiters about their experiences. Settlement processes will become more formulaic, with built-in requirements for independent advice, documented consent, cooling-off periods and clear, accessible drafting. This may also impact the settlement strategies, if there is still a risk of disclosure once agreed.
HR and legal teams should start to think about the impact this will have and the need to revisit their NDA and settlement agreement templates to take account of this change.
What we would advise is that as NDAs become less reliable more focus should be on preventative strategies to mitigate risk, ensuring early reporting, robust handling of complaints, comprehensive policies and procedures and appropriate workforce training.
Larger employers and those in regulated sectors should consider whether to engage with the consultation directly or via sector bodies and trade associations. Those who rely heavily on NDAs in complex disputes, or who engage significant numbers of non traditional workers, may have particular insights into how the new regime will operate in practice and where unintended consequences might arise.
Responses submitted before the consultation closes on 8 July 2026 may help to shape the future of the law in this area and so organisations should consider putting forward their views.
How we can help
We can assist organisations in reviewing NDA and settlement agreement templates to ensure they comply with relevant legal requirements and align with emerging best practice.
We also provide training for HR professionals, managers and senior leaders on the appropriate use of NDAs, the handling of whistleblowing harassment and discrimination complaints and investigations and the management of whistleblowing and regulatory risk.
If you would like advice in relation to any of the above, would like to discuss your current employment practices, policies or procedures, please contact Paul Reeves, Phil Borisov or your usual Stephenson Harwood contact.
This alert provides general guidance only and does not constitute legal advice. Specific advice should be sought in relation to individual matters.