Does your settlement agreement contain a confidentiality clause? If so, it is important to know precisely what you may and may not say after signing. Particularly in an employment dispute, such a clause can have far-reaching consequences if you are not careful.
What is a confidentiality clause in a settlement agreement?
A confidentiality clause is a provision in the settlement agreement that obliges you to keep certain information confidential. This may include the amount of the severance payment, the nature of the dispute, or the arrangements made to terminate the employment.
Employers often include this clause to limit reputational damage or to prevent other employees from making similar demands. That is understandable, but for you as an employee it may mean that you cannot speak freely about what has happened.
What is typically covered by the confidentiality obligation?
The scope varies from agreement to agreement, but the following matters are commonly included:
- The amount of the statutory redundancy payment or any additional compensation
- The precise reason for the dismissal or the dispute
- Internal company information you acquired during your employment
- The exact terms of the settlement agreement itself
- Statements made to the press, on social media, or to future employers
Please note: what is specifically covered depends entirely on the wording of your agreement. Vague or broad language may encompass more than you initially think.
What risks do you face if you breach the clause?
A confidentiality clause is almost always linked to a penalty provision. This means you must pay a fixed amount if you fail to honour the agreement. That penalty can be substantial — sometimes running to several thousand pounds per breach.
In addition, an employer may seek a court order to prevent further disclosures. When emotions run high during an employment dispute, it can be tempting to tell your side of the story. But that is precisely when it is crucial to know where the boundaries lie.
Practical tips if you encounter a confidentiality clause
Before you sign, it is wise to check a number of things carefully. Here are the most important points to consider:
- Read the clause word for word – what does it say exactly, and what is not explicitly covered?
- Check the penalty clause – how high is the penalty and does it apply per breach or as a total amount?
- Think about your reference – what is the employer permitted to say if a new employer calls for a reference?
- Ask for reciprocity – ideally, a confidentiality clause should apply to both parties, meaning the employer is equally bound by it
- Look out for exceptions – providing information to the relevant authorities or a legal adviser is generally always permitted, even with a confidentiality clause in place
- Negotiate the scope – you can propose excluding certain matters, such as the right to disclose your leaving date
Can you always negotiate the clause?
Yes — a settlement agreement is the result of negotiation, and that applies to the confidentiality clause as well. You are entitled to propose that the wording be restricted or amended. Employers are not always keen on this, but with sound arguments and the support of an employment law solicitor, more is often achievable than you might expect.
Arrange a no-obligation chat and discover how we can help you.
Plan a conversationWould you like to know how best to negotiate the terms of a settlement agreement during a dispute? Find out more on the page about Settlement agreement during a dispute: your rights and approach.
Confidentiality and your unemployment benefit
A confidentiality clause must not stand in the way of your entitlement to unemployment benefit. You are free to be open with the relevant authorities about the circumstances of your dismissal. This falls outside the scope of the clause. If you are unsure about this, have the wording reviewed before you sign.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we understand how important it is to fully understand a settlement agreement before you put your signature to it. We know the local employment market in Eindhoven and the Brabant region, and we guide you through the process step by step. Whether you want to understand exactly what a confidentiality clause entails, or you wish to negotiate better terms — we are here to help.
Get in touch with us without any obligation. We would be happy to look at your situation together and explore what options are available to you.
Frequently asked questions
Do I always have to accept a confidentiality clause in a settlement agreement?
No, you are free to negotiate the contents of a settlement agreement, including the confidentiality clause. You can propose limiting its scope or request reciprocity, so that the employer is equally bound by the confidentiality obligation.
What happens if I accidentally breach the confidentiality clause?
There is almost always a penalty provision attached to the clause. You may then be required to pay a fixed sum. In serious cases, the employer may also bring legal proceedings. It is therefore sensible to make sure you fully understand what falls within the scope of the confidentiality obligation.
Am I allowed to tell the relevant authorities why I was dismissed?
Yes, in general you are permitted to be open with the relevant authorities about your dismissal situation, even if your settlement agreement contains a confidentiality clause. Providing information to official bodies generally falls outside the scope of the clause. For certainty, have this checked by an employment law solicitor.
Does the confidentiality clause also apply to what I post on social media?
That depends on the exact wording of the agreement. Many clauses explicitly include statements made on social media. If you are in any doubt, it is advisable to have the wording reviewed before you publish or share anything.
We're happy to help you brainstorm ideas. For advice tailored to your specific situation, we'd be happy to sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
