A confidentiality clause can look like a short standard paragraph near the end of a settlement agreement. In practice, it may affect what you can say about your departure for years to come. Knowing how to challenge confidentiality clauses is therefore not about creating conflict. It is about making sure you understand the commitment you are being asked to give, and that it is fair, lawful and workable in real life.
You do not have to accept wording simply because it appears in the employer’s draft. Settlement agreements are negotiated documents. If a clause is unclear, too broad or prevents legitimate conversations, it may be appropriate to ask for changes before signing.
Start with what the clause actually covers
Confidentiality provisions vary considerably. Some prevent either party from disclosing the financial terms of the agreement. Others cover the circumstances of the employment ending, workplace concerns, business information or statements made about the employer after departure.
The first task is to separate these subjects. An employer may have a legitimate interest in protecting confidential business information, customer data, trade secrets and the agreed settlement sum. That does not automatically justify wording that prohibits you from speaking about every aspect of your work or prevents necessary disclosures in the future.
Read the clause alongside any existing confidentiality obligations in your contract of employment. A settlement agreement should not leave you uncertain about whether it creates new obligations, extends old ones, or duplicates terms that already apply. It should also be clear whether the restriction applies only to you or to both parties.
Broad phrases such as “all matters connected with your employment” or “any information relating to the company” deserve careful attention. Their meaning may be wider than intended. Ask for specific definitions, particularly where the agreement uses terms such as confidential information, the termination, or the dispute.
When can you challenge confidentiality clauses?
You can raise concerns whenever proposed wording does not reflect the reality of your situation or places an unreasonable burden on you. This is common where the agreement follows a grievance, disciplinary process, redundancy exercise, discrimination concern or workplace dispute.
A clause may need changing if it does any of the following:
- prevents you from discussing the agreement with your spouse, partner or close family;
- fails to allow discussions with your solicitor, tax adviser, doctor, therapist or professional counsellor;
- restricts communications with HMRC, a regulator, the police, a court or tribunal;
- appears to stop you making a protected disclosure, often called whistleblowing;
- prevents you from explaining your employment history accurately to a prospective employer; or
- imposes one-sided obligations, while allowing the employer to make statements about you without equivalent limits.
The law does not permit an agreement to prevent a protected disclosure. Nor can a confidentiality clause lawfully stop a person reporting a crime or co-operating with a criminal investigation. However, it is still sensible for the written exceptions to be clear. You should not have to guess whether a necessary disclosure could be treated as a breach.
It also matters whether the clause is proportionate. A limited commitment not to disclose the settlement amount may be easier to justify than an indefinite ban on discussing your experience with anyone. The right balance depends on the reason for the agreement, your seniority, the nature of the information involved and the compensation offered.
Ask for practical carve-outs, not vague reassurance
Employers sometimes say they would not seek to enforce a clause in ordinary circumstances. That may be reassuring, but it is not a substitute for clear written wording. If an exception matters to you, it should usually appear in the agreement.
A well-drafted confidentiality clause will normally permit disclosure to professional advisers who are themselves bound by duties of confidence. It should also allow disclosures required by law, to relevant regulatory or tax authorities, and for the purpose of enforcing the agreement.
Depending on your circumstances, you may also need permission to speak to immediate family, a new employer, recruitment consultants, insurers or healthcare professionals. The wording can require those people to keep the information confidential where appropriate. This gives the employer reasonable protection without isolating you from the support and advice you may need.
If you are concerned about a future job search, discuss this directly. You may need to tell a recruiter why you left, explain a gap in employment, or respond honestly to a question from a prospective employer. It is possible to agree a short, neutral form of words. This should sit consistently with any agreed reference, so you are not left with one clause that says you can give an explanation and another that prevents you from doing so.
Consider mutual confidentiality and non-disparagement
Confidentiality is often presented as an employee obligation, but the employer’s conduct matters too. Where appropriate, ask whether the obligation can be mutual. This may mean the employer agrees not to disclose the terms or circumstances of the settlement, subject to sensible internal and legal exceptions.
The same applies to non-disparagement wording. A term preventing you from making derogatory comments can be commercially reasonable if it is balanced. It may be fair to seek an equivalent undertaking from the employer, its senior staff or named individuals, particularly where reputational concerns have been part of the discussions.
There are limits to what an employer can realistically promise. It cannot always control every former colleague, and it may need to share information internally with HR, finance, legal advisers or managers who have a legitimate need to know. The aim is not to make the clause impossible to operate. It is to ensure it does not place all the risk on one side.
Link the restriction to the settlement package
A settlement agreement involves an exchange. You agree not to pursue specified employment claims, and the employer provides compensation and other agreed terms. Wider restrictions can be part of that exchange, but they should be considered when assessing the package as a whole.
If the employer wants an especially broad confidentiality commitment, that may support a request for improved compensation or more carefully limited wording. Equally, if the financial offer is modest, a restrictive clause may be harder to accept without amendment. There is no fixed formula, but the scope and duration of your obligations should be proportionate to what you receive.
Do not focus on the payment figure alone. Consider the agreed reference, notice pay, holiday pay, bonus or commission, treatment of shares or benefits, legal-fee contribution and tax wording. A strong settlement package should give you both financial security and a clean, credible route into your next role.
Raise changes in a clear, measured way
You do not need to argue every point personally. Your independent legal adviser can identify concerns, explain the legal position and propose amendments to the employer or its solicitors. In many cases, a targeted request is more effective than a long objection to the entire agreement.
It helps to explain the practical reason for each proposed change. For example, you may need to consult a therapist, comply with professional reporting duties, discuss the matter with a spouse, or provide a truthful explanation to future employers. A reasonable request framed in this way is often easier for an employer to accept.
Keep a record of the versions exchanged and do not rely on informal assurances given by telephone. Check that agreed amendments have been incorporated into the final document before it is signed. A settlement agreement usually needs to identify the claims being waived and confirm that you have received independent legal advice for it to be legally valid. That advice should cover the effect of the confidentiality terms, not simply the signature process.
Get advice before the deadline
Employers may set a short deadline, particularly where a termination date is approaching. That does not mean you should sign without understanding the consequences. If the time allowed is unrealistic, it may be possible to request an extension. Most employers want a valid, enforceable agreement and have an interest in allowing you to obtain proper advice.
At Arcos Settlement Agreements, the focus is on clear, independent advice about what the wording means for you and what can sensibly be negotiated. A confidentiality clause should protect legitimate interests without stopping you obtaining support, meeting legal obligations or moving forward with confidence.
Before you sign, make sure the document says what both sides have actually agreed. A few carefully chosen amendments now can prevent uncertainty at the point you most need clarity: when you are ready to leave this employment behind and begin the next chapter.