As employment lawyers, we frequently advise clients on UK non-disclosure agreements (NDAs), also known as a confidentiality agreement. Whether you’re negotiating a settlement agreement, starting a new role, or resolving a workplace dispute, you may come across NDAs. Understanding the meaning of NDAs, what they are—and what they are not—is essential for protecting your rights.

This article explains the purpose, scope, and legal limitations of NDAs in the workplace, and highlights the importance of seeking legal advice before signing one.

What Is a non-disclosure agreement (NDA)?

A non-disclosure agreement (NDA) is a legally binding contract that restricts the disclosure of specific information. In employment settings, NDAs are used to ensure that confidential or sensitive information—such as business plans, trade secrets, or dispute settlement terms—is not shared with others.

NDAs are often referred to as “confidentiality agreements” or “gagging clauses”, particularly in cases where they prevent individuals from speaking about workplace incidents.

NDA vs confidentiality agreement: what’s the difference?

The term “NDA” is sometimes used interchangeably with “confidentiality agreement,” but there is a distinction. A UK confidentiality agreement is often a single provision within a broader contract—like an employment contract or settlement agreement—whereas an NDA can be a standalone agreement focused entirely on confidentiality obligations.

When are NDAs used in the workplace?

NDAs in settlement agreements

NDAs are commonly included in settlement agreements when an employee and employer agree to part ways following a dispute. These clauses usually prevent the employee from discussing the circumstances of their departure or the financial terms of the settlement.

This can apply in situations involving allegations of discrimination, bullying, harassment, or unfair dismissal. While confidentiality may benefit both sides, there is increasing scrutiny of NDAs that silence victims of misconduct.

NDAs during or after disciplinary or grievance procedures

Employers may use NDAs during the resolution of internal disputes, particularly where complaints of misconduct have been raised. In some cases, employees are asked to sign an NDA in exchange for an ex gratia payment or exit package.

NDAs in employment contracts and commercial settings

Confidentiality clauses are also standard in employment contracts. These typically prevent employees from sharing sensitive business information with third parties, both during and after their employment. In commercial settings, NDAs may be used when negotiating business deals, partnerships, or mergers.

What can an NDA legally cover?

Confidential information and trade secrets

NDAs are intended to protect legitimate business interests, including intellectual property, trade secrets, financial data, and client lists. Employees may be bound by these agreements long after leaving the company.

Workplace disputes, harassment, and misconduct

NDAs are also used to resolve workplace disputes discreetly. Employers may seek confidentiality to avoid reputational damage or prevent details from entering the public domain. However, the line between protection and suppression of wrongdoing can be thin.

Restrictions on future disclosures

An NDA may restrict you from speaking to colleagues, the press, or even friends and family about a particular issue. It might also prevent you from making negative statements about your employer. These clauses must be clear, specific, and not overly broad.

What can’t an NDA Do?

Limitations on gagging clauses

An NDA cannot lawfully prevent someone from reporting unlawful conduct. Clauses that attempt to silence someone from reporting discrimination, harassment, or criminal activity may be unenforceable. The law is clear that NDAs must not be used to “gag” employees from raising serious concerns.

Legal rights that cannot be waived by an NDA

NDAs cannot override statutory rights, such as the right to make a protected disclosure (whistleblowing) or the right to bring an employment tribunal claim for future unlawful acts. Nor can they prevent someone from co-operating with law enforcement or regulators.

Whistleblowing and protected disclosures

Under the Public Interest Disclosure Act 1998, workers are protected if they report wrongdoing that affects others, such as criminal offences, health and safety risks, or financial malpractice. NDAs cannot lawfully prevent these protected disclosures.

Assistance with an NDA

An employment lawyer can advise you on the non disclosure agreement that you have been given by your employer, advising you on its meaning, purpose, and terms – this can be as part of a broader settlement agreement negotiation or specific advise on your contract of employment, or potentially as part of advise on restrictive covenants.