New NDA guidance published by ACAS

ACAS (the Advisory, Conciliation and Arbitration Service) today published new guidance on the use of non-disclosure agreements (“NDAs”). Suzanne McKie QC, Founder and Managing Director of Farore Law, notes that this Guidance arguably requires clarification on the right to report to regulators rather than relying on a simple whistleblowing exclusion, and that the need to give claimants time to consider an NDA is interesting in light of “late-night” mediations; whether an employer wants one is perhaps now to be managed ahead of any mediation rather than on the day.

Other comments by Suzanne include the following:

• As a matter of public policy, NDAs cannot prevent a complaint to the police, or whistleblowing. As such, Suzanne is of the view that NDAs cannot do this, even without the new Guidance.

• The whistleblowing exclusion could exclude from the NDA complaints to an employer. This is because of the legal definition of whistleblowing, which can include complaints to an employer. Suzanne notes that this needs clarity: if an employer retains a claimant as an employee as part of a settlement, but extracts an NDA from them, it will be of limited value if the employee concerned may repeat all the “gory details” to another staff member on the following day. However, Suzanne also points out that this begs the question whether or not a retained employee should be bound by an NDA in this way at all. Suzanne is of the view that the need for it is different when it comes to a departing (or departed) member of staff.

• Suzanne also maintains that reporting matters to a regulator should also be excluded, and that this is not necessarily an exclusion that arises under the whistleblowing provisions.

• Suzanne points out that giving employees time to consider an NDA in line with this new Guidance will mean that employers wishing to abide by it will need to approach settlement discussions differently. Such an approach includes raising the issue and sending a draft NDA 24 to 48 hours prior to a mediation if the parties intend to settle at the mediation. This also makes court- or tribunal-based settlements more problematic: courts and tribunals tend to only provide a certain period of postponement (sometimes only hours) to see if a settlement can be reached.

The Guidance is available to view here.