NDAs in Harassment and Discrimination Cases Are Being Restricted: What Employers Need to Know

If your business has ever used a settlement agreement to close out a workplace dispute quietly, this change is one to plan for now, even though it isn’t live yet. The Employment Rights Act 2025 will make most non-disclosure agreements (NDAs) covering harassment and discrimination void and unenforceable, with implementation expected in 2027.

This guide explains what’s changing, in plain English, with no assumed knowledge.

A quick explainer of the terms you’ll see

Non-disclosure agreement (NDA) — a clause, often in a settlement agreement or employment contract, that prevents someone from speaking about a specific matter, such as the circumstances of their departure from a job.
Void — legally treated as if it never existed. A void clause cannot be enforced, even if both parties signed it.
Excepted agreement — the term the government is using for the limited category of NDA that will still be allowed to cover harassment or discrimination, once the detailed rules are finalised.
Settlement agreement — a legal agreement, usually involving a payment, in which an employee agrees not to pursue a claim against their employer in exchange for agreed terms.
Whistleblowing / protected disclosure — a legally protected report by a worker about wrongdoing, which existing law already protects regardless of any NDA a person has signed.

What’s changing

The Employment Rights Act 2025 will insert a new provision making any clause in an agreement between an employer and a worker void, to the extent that it tries to prevent the worker from:

alleging harassment or discrimination,
disclosing information about harassment or discrimination, or
disclosing information about the employer’s response to harassment, discrimination, or an allegation of either.

This applies whether the clause sits in a settlement agreement, an employment contract, or any other agreement between employer and worker. In effect, the standard “keep this confidential” clause many settlement agreements currently rely on will no longer be enforceable where it touches on harassment or discrimination.

The one exception: “excepted agreements”

The law will still allow NDAs to be used in this context in limited circumstances — referred to as excepted agreements. The exact rules aren’t finalised yet (a government consultation on this closed on 8 July 2026), but the direction of travel is fairly clear from what’s been proposed:

Excepted agreements will only be able to cover past incidents — they can’t be used to silence someone about harassment or discrimination that might happen in the future.
They’re likely to require the worker to have received independent legal advice before signing.
They’re likely to require written, informed consent from the worker.
A cooling-off period is being considered, giving the worker time to reconsider before the agreement becomes binding.
Even where an excepted agreement is in place, workers are expected to retain the right to disclose information to certain people and bodies regardless — such as regulators, lawyers, trade union representatives, and support services.

Why this matters even before it’s in force

Two reasons to start thinking about this now, rather than waiting for 2027:

This isn’t retrospective, but it will apply to agreements made after the measures take effect — so any settlement agreements or contract wording you’re relying on today should be reviewed well before implementation, not scrambled together at the last minute.
The direction of policy is already clear. Even without final regulations, the government’s intent — addressing what it describes as a “culture of secrecy” that can leave perpetrators in place — signals a lasting shift in how confidentiality clauses will be viewed, including by tribunals interpreting existing agreements.

It’s also worth knowing that existing law already limits NDAs in related situations. Since 1 October 2025, NDAs cannot prevent disclosures by victims of certain criminal conduct in England and Wales. And an NDA has never been able to override a worker’s whistleblowing protections — a protected disclosure remains protected regardless of what a confidentiality clause says. This new measure builds on that existing direction rather than starting from nothing.

What employers should do now

Review your standard settlement agreement wording. If your confidentiality clauses are broad and don’t distinguish harassment/discrimination matters from other confidential terms (like commercial or financial details), they’ll need updating once the final rules land.
Don’t rely on an NDA as your primary way of managing a harassment or discrimination complaint. Build genuine resolution — proper investigation, fair process, and a real outcome — into how you handle these cases, rather than treating confidentiality as the fix.
Keep an eye on the excepted agreement regulations. Once published, they’ll set out exactly what conditions (legal advice, consent, cooling-off period) any remaining confidentiality provision will need to meet.
Think about culture, not just contracts. This reform is aimed squarely at preventing repeat behaviour going unaddressed — pairing it with the strengthened harassment prevention duty we covered in our previous article gives you a genuinely joined-up approach, rather than two separate compliance boxes to tick.
Brief whoever handles exits and settlement negotiations in your business, so they understand this change is coming and don’t lock in agreements now that won’t hold up later.

How Cheviot HR can help

Getting ahead of this means reviewing how you currently use confidentiality clauses, and building harassment and discrimination handling processes that don’t lean on silence as the solution. We can review your settlement agreement templates, advise on live cases, and help you build a genuinely resolution-focused approach ahead of the 2027 changes.

Get in touch at heidi@cheviothr.co.uk or visit https://cheviothr.co.uk to talk through what this means for your business.