NDAs and the Employment Rights Act: proposed restrictions explained

• 6 May 2026
• News
• Employment

The government published its long-awaited consultation on the misuse of non-disclosure agreements (NDAs) on 15 April 2026. It has now also confirmed that we can expect restrictions on the use of NDAs to come into force over the course of 2027.

Under the Employment Rights Act, broadly, NDAs relating (broadly) to work-related discrimination or harassment will be void unless they meet certain criteria, which will be defined in secondary legislation. The concern among employers and practitioners has been that, depending on how those criteria are framed, the restrictions may inhibit settlement discussions and make employment disputes involving allegations of discrimination or harassment more difficult to resolve. The consultation now gives a first concrete insight into the government proposals.

The key takeaway is that, if the proposals are implemented in substantially their current form, it will remain possible to use NDAs in discrimination and harassment matters as long as certain procedural conditions are met. These are not unlike the existing conditions for the valid settlement of employment claims, though they go further, with proposed conditions including:

• A requirement for employees to receive independent written advice on the terms, effect and legal limitations of any NDA before entering into it, and for the employee, following that advice, to indicate their preference to enter into the NDA in writing.
• A mandatory cooling-off period to be observed after an NDA is signed. Where the NDA is included in a settlement agreement, the proposal would be for this to apply to the settlement agreement as a whole. The cooling-off period is currently proposed to be set at 14 days, though the government is consulting on shorter periods, as well as an alternative (or additional) pre-signing review period.
• A requirement for a written copy of the NDA to be given to the employee after it is signed.
• A condition that the NDA relates to matters that have already occurred, rather than any potential future instance of discrimination or harassment.

That is not yet the end of the story, as the consultation contemplates other possible conditions which would more fundamentally affect settlement practice – e.g. voiding NDAs where they have been proposed by the employer, rather than the employee, or time-limiting NDAs. However, while the consultation seeks views on these options, they are not proposals, so, as it stands, the consultation provides cause for cautious optimism.

Besides the criteria for valid NDAs, the consultation seeks views on proposals around the categories of individuals to whom employees can disclose information notwithstanding a valid NDA (no major surprises here) and around extending the protections to other categories of individuals, including agency workers and defined groups of self-employed individuals.

The consultation closes on 8 July 2026, and we will provide you with a detailed briefing on the changes once the position is confirmed.