A settlement agreement which explains that the employee has to keep the terms and existence of the agreement confidential (or they’ll repay the settlement money) is open to challenge according to a recent High Court decision.
We’ve updated our template COT3 and settlement agreement templates to ensure there’s the greatest chance of enforcing confidentiality provisions in light of the High Court’s judgement.
The Court did suggest there are still things you can do to ensure the enforceability of these clauses:
- Explaining how important confidentiality is to you during negotiations;
- Re-wording agreements to say that keeping confidentiality is a “strict condition” of retaining the settlement money; and/or
- Stating that a specific portion of the settlement money is being paid in return for confidentiality – so you can seek to recover that part of the settlement money if the confidentiality clause is breached.
We’ve updated our template COT3 and settlement agreement templates to re-word the confidentiality provisions, to give them the greatest chance of being enforceable in light of the High Court’s judgement.
If you have your own settlement templates, we’d highly recommend that you review them – click here for our support in doing so.