NDAs in Settlement Agreements: The Law is Changing
If you are offered a settlement agreement following a complaint about harassment or discrimination at work, the confidentiality terms — the secrecy or confidentiality clauses (‘NDAs’) in that agreement will be subject to important new legal rules when they come into force.
The Employment Rights Act 2025 received Royal Assent in December 2025. It introduces a new section into the Employment Rights Act 1996 — Section 202A — which makes it unlawful to prevent a worker from speaking out about relevant harassment or discrimination defined in the Equality Act 2010 through a confidentiality clause in any agreement. NDAs that attempt to do so will be void — unenforceable in law unless the agreement qualifies as an excepted agreement.
This is a major change to employment law and will affect how settlement agreements are drafted and how settlement negotiations and without prejudice communications are conducted.
What Does Section 202A Actually Say?
Section 202A of the Employment Rights Act 1996, inserted by section 24 of the Employment Rights Act 2025, once in force, will mean any provision in an agreement between an employer and a worker (which does not qualify as an excepted agreement) is void in so far as it purports to prevent the worker from making:
- an allegation of, or disclosure of information about, relevant harassment or discrimination; or
- a disclosure relating to their employer’s response to such harassment or discrimination — including how a grievance or complaint was handled.
Relevant harassment and discrimination covers conduct under the Equality Act 2010, including direct discrimination (section 13), discrimination arising from disability (section 15), indirect discrimination (sections 19 and 19A), gender reassignment discrimination (section 16), pregnancy and maternity discrimination (sections 18 and 19), and harassment including sexual harassment (section 26).
Critically, section 202A is broad in two ways.
First, there is no restriction on who the worker can speak to. Unless an excepted agreement is in place, the worker may in principle disclose details of the relevant harassment or discrimination to anyone — including, potentially, the press or on social media.
Second, the provision covers not just the underlying conduct but also the employer’s response to it. This means that how an employer handled a grievance — whether it was investigated properly, what the outcome was, what the perpetrator was or was not told — may no longer be protected by an NDA.
Importantly, it is worth noting that section 202A removes the contractual barrier to speaking out in certain circumstances — it does not grant employees immunity from the general law. An employee who repeats allegations publicly to the press or on social media, remains subject to the law of defamation. If sued, the burden falls on the employee to prove the truth of what they said — not on the employer or accused individual to disprove it. Employees considering speaking out after settlement should take advice not just on what the new law permits, but on the legal risks that remain.
When Does This Come Into Force?
The core operative provisions — making NDAs void and defining excepted agreements — will not come into full force until regulations are made following a government consultation. The commencement date for those regulations has not yet been announced.
The July 2025 implementation roadmap published by the Department for Business and Trade — which set out a phased timetable for the Employment Rights Act — did not include the NDA provisions, because those provisions were added to the Bill later in its parliamentary passage. The February 2026 update to that roadmap similarly makes no reference to them. The most likely commencement window, based on the current parliamentary timetable, is late 2026 or 2027, though this remains subject to the outcome of the government’s consultation on excepted agreements, which has not yet commenced.
So What Is an Excepted Agreement?
The law does not make all NDAs in harassment and discrimination cases void outright. Section 202A(3) creates a carve-out: an NDA will still be valid if it satisfies conditions set by the Secretary of State in regulations. An agreement meeting those conditions is called an “excepted agreement.” also known as an‘excepted NDA’.
The regulations defining excepted agreements have not yet been published. Commentators have pointed to the Irish model — where similar legislation has been in force since November 2024 — as a likely template. The expectation is that the UK’s excepted agreement conditions will include a requirement that:
- the worker requests the NDA; and
- the worker receives independent legal advice on its terms — with the employer expected to meet the cost of that advice.
This is a fundamental shift. Under current practice, employers routinely include broad NDAs as a standard feature of settlement agreements in harassment and discrimination cases. Once the new rules fully come into force, it will be the employee who holds the power to decide whether confidentiality applies to relevant harassment and discrimination. There is nothing preventing a valid and well-drafted NDA in a settlement agreement requiring secrecy in other respects, subject to the standard permitted disclosures exceptions that already feature in well drafted settlement agreements.
Even where an excepted agreement is in place, section 202A(4) gives the Secretary of State a further power to specify by regulations that certain disclosures remain available to the worker regardless — for example, to particular individuals or for particular purposes. So even a valid excepted NDA may not be as watertight as NDAs in settlement agreements have historically been. We expect such regulations may well formalise what is common drafting practice to list permitted disclosures which accord with the approach taken by many regulators like the SRA – ‘SRA warning notice concerning inappropriate use of NDAs‘.
What Can We Learn From Ireland?
Ireland is ahead of the UK on this issue. The Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024 (section 5) came into force on 20 November 2024 and introduced an almost identical framework by inserting a new section 14 into the Employment Equality Act 1998 — making NDAs in harassment, discrimination and victimisation cases void unless they qualify as an excepted non-disclosure agreement or a written settlement arising from Workplace Relations Commission (WRC) mediation.
Under the Irish rules, an excepted NDA must meet all of the following conditions:
- it must have been requested by the employee — the employer cannot propose or insist on it;
- the employee must have received independent legal advice in writing before signing, with the employer required to pay the reasonable costs and expenses of that legal advice;
- be of unlimited duration unless the employee elects otherwise;
- it must be in writing, in clear and accessible language, with a copy provided to the employee;
- it must allow the employee to withdraw from the agreement without penalty within 14 days of signing; and
- it must include a provision making clear that the employee is not prevented from making relevant disclosures to a defined list of persons — including lawyers, doctors, mental health professionals, police, trade union officials, the Garda Síochána; and the Ombudsman.
How Will These Changes Affect the Settlement of Harassment Claims?
If we assume an NDA in a harassment settlement will only be available if the employee requests it, some employees will want confidentiality — for reasons of personal privacy, to protect their mental health, or because they simply want to move on without the dispute becoming public. In those cases, an excepted agreement will be available.
But some employees will not request an NDA. And where no excepted agreement is in place, an employer settling a harassment claim will be doing so knowing that the employee is free to discuss the allegations, the settlement, and how the employer responded to the grievance — with anyone, potentially including journalists or former colleagues.
For reputation-conscious employers, this is a material change. It does not eliminate the incentive to settle entirely, but it does reduce a powerful reason for doing so — the ability to contain the story. Employers’ responses to grievances may now need to be far more carefully considered, since the way they handle a complaint could itself become public, regardless of whether a settlement is later reached.
Will More Harassment Claims Be Defended Rather Than Settled?
This is one of the most significant questions raised by the reform — and the government has acknowledged it directly in its own impact assessment.
The Department for Business and Trade’s assessment recognised that restricting the use of NDAs may mean that fewer harassment and discrimination claims are resolved through settlement agreements. As a result, more cases may be brought to Acas Early Conciliation and the Employment Tribunal. That would increase the costs for employers defending claims, as well as adding to the existing pressure on the Tribunal system, which is already operating with significant backlogs in many regions.
Where an employer would previously have paid a sum to settle and preserved confidentiality, the question after the reform may become: if we are paying to settle but cannot guarantee silence, is it worth settling at all, especially if there’s a risk of inferred wrongdoing by the public, customers and others if the fact of the settlement comes into the public domain? For some employers — particularly those confident in their defence — the answer may increasingly be no.
This could have real consequences for employees. Pursuing an Employment Tribunal claim for harassment or discrimination is stressful, time-consuming, risky and often financially challenging. A landscape in which employers are more willing to litigate is not straightforwardly better for employees, even if the policy intent behind the reform is protective.
In cases where the employer has a material legal risk of losing, they may be crossing their fingers that the employee indicates they want an excepted agreement. But if no such request lands, will employers begin to settle without an NDA in these cases, casting adrift individual perpetrators and positioning them as a rogue that breached company culture, policies and training, hoping the employee sees it that way?
The way employers are perceived by complainants, the extent to which employers have tried to take tangible proactive steps to prevent harassment, and how they respond to complaints and the support their provide employees, might become key to managing an employer’s reputational risks.
It also places a premium on the quality of advice employees receive regarding the conduct of negotiations and settlement agreements. Understanding the relative merits of a claim, the realistic value of any award, and the implications of proceeding to Tribunal rather than accepting a settlement offer will matter more, not less, as the reform beds in. Employees with redundancy or unfair dismissal elements to their claims will also need to factor in how those elements interact with any harassment complaint when deciding whether to settle.
How Does This Fit With Existing NDA Protections?
The Employment Rights Act 2025 builds on a series of earlier reforms that have progressively restricted the use of NDAs in employment contexts.
Whistleblowing has long been protected. Section 43J of the Employment Rights Act 1996, inserted by the Public Interest Disclosure Act 1998, already makes void any provision in an agreement that purports to prevent a protected disclosure. The new section 202A goes further — it does not require the worker to establish that their disclosure meets the technical definition of whistleblowing.
Victims of crime received new protections from 1 October 2025 under section 17 of the Victims and Prisoners Act 2024. NDAs entered into on or after that date cannot prevent a victim or direct witness of a crime from disclosing information about that crime to specified persons — including the police, lawyers, regulators, medical professionals and close family members. The government has also indicated it intends to go further, allowing victims of crime to speak to anyone about the criminal conduct they experienced, regardless of any NDA.
Higher education workers have their own sector-specific protection from 1 August 2025 under the Higher Education (Freedom of Speech) Act 2023. Higher education providers cannot enter into NDAs with staff, students, or visiting speakers in relation to complaints about sexual abuse, sexual harassment, sexual misconduct, or other forms of bullying and harassment.
Section 202A sits alongside these protections, adding a general prohibition for the workforce as a whole.
What Does This Mean if You Are Signing a Settlement Agreement Now?
As at the date of this article, the new section 202A is not yet in full force. Settlement agreements signed today still operate under the existing rules.
However, there are things you should know right now. Your agreement should already contain permitted disclosures — carve-outs allowing you to speak to the police, regulators, professional advisers, medical professionals, and close family members regardless of any NDA. Our confidentiality page explains how these provisions currently work.
Broad gagging clauses that attempt to prevent any disclosure are already questionable under Solicitors Regulation Authority regulatory guidance, and may be void under the existing whistleblowing provisions.
Key Takeaways
- The Employment Rights Act 2025 (section 24) inserts new section 202A into the Employment Rights Act 1996, making NDAs insofar as their purport to prevent disclosures about relevant harassment and discrimination void. It is not yet in force though.
- This covers relevant harassment and discrimination under the Equality Act 2010, and includes how the employer responded to a complaint.
- The only exception is an excepted agreement — conditions will be set by regulations, expected to require the employee to request confidentiality and to receive independent legal advice at the employer’s cost.
- These changes do not alter the law regarding defamation, meaning publications of allegations in the press or media may give rise to satellite litigation in the courts for damages and injunctive relief.
- Ireland’s model, in force since November 2024, provides an insight into what the UK’s regulations may look like.
- The changes may reduce settlement rates in harassment claims and may lead to more cases being defended at Employment Tribunal.
- These reforms are not yet in full force — regulations following consultation are required, with commencement expected no earlier than late 2026.
Legal Disclaimer
The contents of this article are intended to be for general information purposes only and do not amount to (nor are they intended to be) legal, tax or financial advice or a complete or authoritative statement of the law nor should they be treated as such. No warranty or promise is given, express or implied, as to accuracy of the information on this page and no liability is accepted for any error or omission. You should instruct a specialist employment solicitor to advise you on your particular situation and not act or rely on the information on this page.
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