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In March 2024, the Treasury Select Committee delivered its’ report entitled ‘Sexism in the City’. As part of the enquiry, the committee found a ‘shocking’ prevalence of sexism and misogyny towards women working in financial services, and recommended a total ban on the use of non-disclosure agreements (NDAs) and clauses in all harassment cases.

In its response to the Select Committee’s recommendations, the UK government has now pushed back against a move to ban NDAs, saying that they would already ‘most likely’ be unenforceable when reporting a crime to the police. In the Government’s opinion the law therefore does not need to go any further.

As part of the rationale for this decision, the government said, “When it comes to sexual harassment and discrimination, it is important to recognise that individual circumstances vary. The government consultation on ‘Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination’ in 2019 also heard evidence that many employees who sign a settlement agreement at the end of their employment with an organisation value the inclusion of confidentiality clauses, as they allow them to move on and make a clear break.” It added that an NDA would also be unenforceable if it sought to prevent a worker making a protected disclosure about wrongdoing to a prescribed person for whistleblowing purposes.

This move means that employers will be able to continue using NDAs in most common situations where a crime is not involved. It is important to remember, however, that other laws and guidance already exist on how NDAs should be used. These include  best practice guidance from the Equality and Human Rights Commission and Acas guidance for employers, as well as the Solicitors Regulation Authority’s warning notice on NDAs. In addition, all employers regulated by the Financial Conduct Authority must include a clause in any NDA making it clear that it does not prevent a protected disclosure.

Get in touch if you require further guidance on the use of NDAs in relation to allegations of harassment by employees.