Monday, 05 October 2015

Settlement Agreement - Confidentiality Clauses

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I get a lot of calls from clients who have been offered a Settlement Agreement (previously known as a Compromise Agreement).  A Settlement Agreement is a contract between an employer and employee which usually sets out terms for the employee to give up their job and any Employment Tribunal claims they may have, in exchange for payment of compensation from their employer.
Client reactions are extremely varied.  I have some who are delighted and can't wait to sign and others who have been given a Settlement Agreement out of the blue and are in complete shock.  Whatever their reaction, it is my job to make sure they understand what the Settlement Agreement means for them, what rights and claims they are giving up and that they have all the information they need to decide whether they want to sign.
In any event, there are a few clauses to look out for and think about if you are considering a Settlement Agreement.  This is the first in a series of blogs where I will look at some of the clauses which can trip up employees.  Today's topic is the thorny issue of confidentiality. 
There is likely to be a clause preventing you from discussing the existence or terms of the agreement. Most employers acknowledge that you have to tell some people for example, your solicitor, HMRC and your immediate family - although they will be under the same obligation to keep the information they have confidential.
It is also likely your employer will ask you to confirm you haven't already discussed Settlement Agreement outside of a few identified people.  If are negotiating with your employer in anticipation of a Settlement Agreement, be careful who you discuss it with - you don't want to put yourself in the position of being unable to sign.
Also, it is not always clear what you can say to a new employer about your reason for leaving - especially if you can't refer to the Settlement Agreement.  It is therefore best to have these issues discussed and recorded with the agreement itself so there can be no suggestion that you are in breach through looking for another job.
Breaches of the confidentiality clause are being pursued much more often.  It used to be very difficult to prove a breach as an employer would need witnesses and there would always be an argument about what was actually said.  However, social media has changed this situation and now gathering evidence of who said what and when is as easy as a few mouse clicks. 
If you have been offered a Settlement Agreement and are looking for the right solicitor to help you, give me a call on 01522 539501 for a free, no obligation consultation or visit our website at
Sally Hubbard
Employment Law Solicitor
LincsLaw Solicitors, Lincoln
Sally Hubbard

Sally is a Lincolnshire girl through and through and has lived in Lincoln her whole life (apart from a brief spell when she went to university in Nottingham, but we don’t talk about that). She began her career with Lincolnshire County Council qualifying as a solicitor in 1996, which she believes now makes her "vintage".

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