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Settlement agreement

Confidentiality clauses are standard in settlement agreements, preventing employees from disclosing the agreement’s existence or terms. But are these clauses truly effective?

Check out this Halborns series to explore the nuances of confidentiality clauses and what you need to consider.

Drafted well, the confidentiality clause is lawful and reasonable. But in order to achieve a workable agreement the wording needs to take into account the following:

Protected disclosures – make clear that nothing in the confidentiality clause prevents the exiting employee from ‘blowing the whistle’. If it looks like you’re attempting to stop them from blowing the whistle the clause and possibly the entire agreement will be unenforceable.

Likewise, don’t expect to be able to prevent the exiting employee from working with authorities, including the police, about the matters covered by the agreement (even about any already known claims, grievances or issues).

Carve out exceptions – make it clear that the exiting employee isn’t prevented from discussing or raising specific issues with you. Although there’s no legal requirement to do this including wording along these lines helps with the enforceability of the wording.

Protecting wellbeing – call out that exiting employees can speak about the terms of their agreements with professionals including medical, therapeutic, counselling, legal or financial services.

Get in touch if you need help reviewing your agreements to support with the enforceability of your confidentiality clauses.

Click here to explore ‘Settlement series #4 – what kind of agreement is best?’. 

What kind of settlement agreement is best?

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