Gagging Clauses
What Can I Say About My Former Employer?
A gagging clause is a term used in an employment context to set out what an employee can or cannot say about certain situations or information. For example, perhaps an employee has made a claim against their former employer for unfair dismissal, constructive dismissal or discrimination. Gagging clauses may seek to control what the employee can say about what happened and how much they settled the case for.
However, there is often some confusion about a clause that seeks to restrict the disclosure of confidential information by an employee and a clause that seeks to prevent the disclosure of derogatory information. So, in this article, we take a look at gagging clauses, settlement agreements and what you can and can’t say.
Documents you need to consider
You may feel very strongly about an injustice or something that has happened at work that you want to speak out about, but before you do, there are a number of considerations to take into account. The first is to check any relevant documentation or agreements you may have signed, including your:
- Contract of employment
- Non-disclosure agreement
- Settlement agreement
Confidential information
General confidentiality clauses are used in employment contracts and NDAs (and sometimes also in settlement agreements) to protect an employer’s confidential information in order to prevent unfair competition.
In this context, confidential information broadly falls into three categories:
- Personal information of other employees
- Personal information relating to customers and clients
- Business information, know-how and trade secrets referred to as proprietary information
Clauses seeking to prevent the disclosure of such information are fairly standard, although they should still be drafted with care and you should take professional advice before signing. If the scope of the clause is too wide, it may be unenforceable. This may happen when a confidentiality clause is used in a settlement agreement to prevent an employee whistleblowing or disclosing wrongdoing/criminal acts.
Settlement agreements and non-disclosure of derogatory information
A settlement agreement is a contractual document that sets out the terms and conditions of an agreed settlement of the issues between the parties in an employment dispute. You can read more about settlement agreements here: Settlement Agreements
Whilst it is acceptable for a settlement agreement to deal with confidential information, it is not uncommon for a settlement agreement to be used to try and control what the parties can disclose about the nature of the dispute or issues between the parties and the terms of the settlement agreement itself.
For example, the employer may seek a clause that the former employee will not make any derogatory statement(s) about their employer and / or colleagues or say something that might damage the employer’s reputation.
What is permitted
A clause that seeks to restrict what someone can say must be very carefully drafted. What is generally acceptable is:
- A clause that prohibits the disclosure of both the existence of the settlement agreement, and its terms and conditions
- A clause under which the employee undertakes not to make any derogatory remarks about the employer, its servants or agents, and a reciprocal clause under which the employer undertakes to use its best endeavours to prevent its servants or agents from making derogatory remarks about the employee
Such clauses are not normally limited in time, so they do not come to an end after a certain period of time.
What is not permitted
Confidentiality clauses must not be used to prevent the reporting of a suspected crime, disclosures required by HMRC or a regulator, ombudsman or other supervisory authority or disclosures required by courts or tribunals.
Similarly, a settlement agreement should also not prohibit an individual from speaking about certain matters to their spouse, family, friends (with limitations), experts or professional advisors or speaking to authorities for the purpose of claiming any benefit(s).
Every case will have its own unique circumstances which means there will often be a grey area when it comes to determining the scope and appropriateness of any clause in a proposed settlement that restricts what you can or can’t say. Therefore, it’s important to take professional advice before agreeing to such a term and signing a settlement agreement.
If you would like to discuss the terms of a settlement agreement or gagging clauses, please get in touch.
The legal content provided by RSW Law Limited is for information purposes only and should not be relied on in any specific case without legal or other professional advice.
Copyright is owned by RSW Law Limited and all rights in such copyright are reserved. Material is not to be reproduced in whole or in part without prior written consent.
