Confidentiality clause in a settlement agreement during a dispute: what does this mean for you?

Confidentiality clause in your settlement agreement

Does your settlement agreement contain a confidentiality clause? If so, it is important to know exactly what you may and may not say after signing. Particularly in the event of an employment dispute, such a clause can have far-reaching consequences if you do not pay close attention to it.

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. Think of 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 claims. 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 transition payment or any additional payment
• The precise reason for the dismissal or the dispute
• Internal company information you acquired during your employment
• The exact arrangements set out in 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 in 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 comply with the agreement. That penalty can mount up considerably — sometimes running to several thousands of euros per breach.

In addition, an employer may seek a court order to prohibit further statements. When an employment dispute becomes highly charged, 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 when 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 literally – what does it say exactly, and what is not explicitly covered?
• Check de boeteclausule – how high is the penalty amount, and does it apply per violation or as a total amount?
• Denk aan je referentie – what is the employer permitted to say if a new employer calls for a reference?
• Vraag om wederkerigheid – a confidentiality clause should ideally apply to both parties; the employer would then also be prohibited from disclosing anything
• Let op uitzonderingen – seeking advice from UWV or a legal adviser is generally always permitted, even where a confidentiality clause is in place
• Negotiate the scope – you can propose excluding certain matters, such as the right to disclose your leaving date

Can you always negotiate over the clause?

Yes, a settlement agreement is the result of negotiation. The same applies to the confidentiality clause. You are entitled to propose limiting or amending the wording. Employers are not always receptive to this, but with sound arguments and the support of an employment lawyer, there is often more room for manoeuvre than you might expect.

Would you like to know how best to negotiate the contents of a settlement agreement in a dispute situation? Read more on the page about Settlement agreement in a conflict situation: your rights and approach.

Confidentiality and your unemployment benefit (WW)

A confidentiality clause must not stand in the way of your entitlement to unemployment benefit (WW). You are free to provide UWV with full disclosure of the circumstances surrounding your dismissal. This falls outside the scope of the clause. If you are uncertain about this, have the wording assessed before you sign.

Why Employment 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 are familiar with the local labour market in Eindhoven and the Brabant region and will guide you through the process step by step. Whether you want to know exactly what a confidentiality clause entails, or you wish to negotiate better terms – we are here to help you.

Contact us without obligation. We would be happy to look at your situation together and explore what options are available.

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 duty of confidentiality.

What happens if I accidentally breach the confidentiality clause?

There is almost always a penalty provision attached to the clause. You may be required to pay a fixed sum. In serious cases, the employer can also initiate legal proceedings. It is therefore wise to make sure you have a thorough understanding of what falls within the scope of the confidentiality obligation.

Am I allowed to tell UWV why I was dismissed?

Yes, in general you are permitted to be open with UWV about your dismissal situation, even if there is a confidentiality clause in your settlement agreement. Providing information to official authorities typically falls outside the scope of the clause. To be certain, have this checked by an employment lawyer.

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 cover statements made on social media. If you are in any doubt, it is wise to have the text reviewed before you publish or share anything.

We are happy to think along with you. For advice tailored to your situation, we would be glad to talk. No rights can be derived from the content of this page and it may contain inaccuracies.