What they are

A confidentiality clause — often called an NDA or gagging clause — restricts what you can say. They are lawful and common in settlement agreements. But they can never prevent you reporting a crime or making a protected disclosure, and from 2027 they will not be able to silence you about harassment or discrimination.

What they legitimately cover

• the existence and terms of the agreement
• the settlement figure
• the content of negotiations
• genuine trade secrets, technical know-how and proprietary processes
• pricing, margins, business plans and financial data
• customer and supplier lists
• other confidential business information

Employers have a real interest in confidentiality about settlement sums, not least to avoid setting internal benchmarks. That is a legitimate commercial concern, and you can reasonably trade it for value.

What no NDA can prevent

Under section 43J of the Employment Rights Act 1996, any clause purporting to prevent a protected disclosure is void. Regardless of wording, a clause cannot lawfully stop you:

• reporting a criminal offence to the police
• co-operating with a criminal investigation
• making a protected disclosure under the whistleblowing legislation
• reporting to a relevant regulator — FCA, SRA, CQC, HSE, ICO, a professional body
• complying with a legal or regulatory obligation
• giving evidence or complying with a court order
• disclosing to HMRC
• speaking to your legal and tax advisers
• speaking to a doctor, therapist or counsellor about your health

A well-drafted agreement sets these out expressly. If yours does not, ask. An employer that refuses is telling you something.

Carve-outs you should also request

• your spouse, partner or immediate family, on terms they keep it confidential
• your accountant, financial adviser and mortgage provider
• your insurer
• prospective employers, to the limited extent of explaining your departure
• recruitment consultants
• for regulated professionals, your professional body where disclosure is required

Section 202A: the reform

Any provision in an agreement between an employer and a worker preventing the worker from making allegations about, or disclosures relating to, relevant harassment or discrimination — or the employer’s response to it — will be void.

Relevant harassment or discrimination is widely defined. It includes conduct carried out, or alleged to have been carried out, by the employer or another worker, and situations where the worker or a colleague is the victim regardless of who carried out the behaviour — so it captures, for example, a worker sexually harassed by the employer’s client.

It applies to all types of agreement, including settlement agreements, employment contracts and COT3 agreements. Workers will be able to talk about allegations, information relating to them, and how the employer responded, covering sexual harassment, bullying amounting to harassment, and other Equality Act discrimination.

NDAs will remain enforceable where they meet conditions set out in regulations as “excepted agreements”, broadly intended for cases where the worker actively wants confidentiality.

When it starts, and a widespread misconception

Section 202A does not come into force in October 2026. That is a common misunderstanding. It requires separate commencement regulations following the consultation that closed on 8 July 2026, with the response and draft regulations expected during 2027. There is no confirmed date.

And it is not retrospective. Only agreements entered into after it comes into force will be affected.

What this means if you are signing now

A confidentiality clause you sign today, covering a harassment or discrimination complaint, is currently effective and will remain so. Your options:

• negotiate a carve-out now, referring to the direction of legislative travel
• accept confidentiality but price it — it is a term of value and you should be paid for it
• push for mutuality, so the employer and named individuals are bound too
• narrow the scope to the settlement sum only, rather than the underlying allegations
• ensure it does not prevent you giving evidence for a colleague

Many employers are already softening their drafting in anticipation. It is worth asking.

Non-disparagement

Distinct from confidentiality: it stops you making derogatory statements. Check whether it is mutual — does the employer, and do named individuals, also agree not to disparage you? A one-sided clause is often negotiable, and mutuality has real value where you are worried what will be said to recruiters.

Check also whether it covers only the company or extends to officers and employees; whether it is subject to protected disclosure and legal obligation exceptions; whether truth is a defence; and whether the employer has committed to instructing relevant managers internally, which is what makes it effective.

Clawback

Some agreements require repayment of the entire settlement for any breach, however minor. That is disproportionate and frequently negotiable — to a specified portion, to damages for actual loss, or subject to a materiality threshold.

Eight questions before signing

1. What exactly is confidential?
2. Who may I speak to?
3. Are protected disclosures and regulator reports expressly preserved?
4. Are family, legal, tax and medical advisers covered?
5. Is the obligation mutual?
6. What happens on breach, and how much is at risk?
7. Does it prevent me supporting a colleague’s claim?
8. Is there an end date, or does it run indefinitely?