Meta description: Section 202A will restrict NDAs in settlement agreements. Learn what employers and employees need to know about the proposed 2027 changes.

The rules on confidentiality clauses in workplace settlements are set to change significantly. Section 202A, introduced by the Employment Rights Act 2025, will restrict the use of non-disclosure agreements (NDAs) where they prevent workers from speaking about relevant workplace harassment or discrimination.

The change will affect private settlement agreements and is also expected to apply to Acas COT3 agreements. However, the detailed regulations are not yet final, and the operative provisions are expected to commence in 2027.

This article explains what the new restrictions are intended to do, how the proposed 14-day cooling-off period may work and why both employers and employees should obtain advice before signing a settlement agreement.

Important: This article reflects the legislation and government consultation position available on 21 September 2026. The detailed regulations and commencement date should be confirmed before relying on the new rules.

What does section 202A do?

Section 202A will make a confidentiality provision void to the extent that it prevents a worker from speaking about relevant harassment or discrimination.

The restriction applies to any agreement between an employer and a worker, whether or not it is an employment contract. This means it can cover:

• Settlement agreements;
• Employment contracts;
• Standalone NDAs; and
• Acas COT3 agreements, subject to the final regulations.

The ban is wider than simply preventing a worker from reporting sexual harassment. It covers relevant discrimination and harassment within the scope of the Equality Act 2010, including allegations involving protected characteristics.

A provision may be void if it prevents the worker from:

• Making an allegation about harassment or discrimination;
• Disclosing information about alleged harassment or discrimination;
• Discussing the employer’s response to the conduct; or
• Discussing the employer’s response to a previous allegation or disclosure.

The protection can apply even where the worker is discussing conduct affecting a colleague. It may also cover harassment by a third party, such as a client, where the worker or a fellow worker is the alleged victim.

The change is targeted. It does not prohibit all confidentiality clauses. NDAs protecting genuine commercial information, trade secrets or other unrelated confidential material will not automatically be affected by section 202A.

When can an NDA still be used?

The legislation allows regulations to create an exception for an “excepted agreement”. The government has consulted on the conditions an agreement would need to satisfy before a confidentiality provision concerning harassment or discrimination could remain enforceable.

All of the required conditions would need to be met. The proposed conditions include the following.

1. Independent written legal advice

The worker must receive written advice from an independent adviser about:

• The terms and effect of the confidentiality provision;
• What information the clause covers;
• The legal consequences of breaching the provision; and
• The legal limitations of the confidentiality obligation.

This goes beyond simply confirming that the worker has received advice on the settlement agreement as a whole. The adviser must explain that the NDA cannot lawfully prevent disclosures protected by section 202A or other legal protections.

The adviser must be independent and appropriately qualified. For a statutory settlement agreement, this will generally involve a solicitor, authorised legal executive, trade union representative or another person falling within the relevant legal definition.

2. The worker must confirm their preference in writing

The worker must express, in writing, that they prefer to enter into the agreement containing the confidentiality obligation.

This requirement is intended to demonstrate informed consent. The worker should not merely sign a document presented by the employer without confirming that confidentiality is their preference after receiving advice.

The written confirmation could potentially be an email or a separate signed statement, although the final regulations will determine the precise requirements.

3. A mandatory 14-day cooling-off period

The proposed rules would require an excepted agreement to include a right for the worker to withdraw without penalty within 14 calendar days of entering into it.

The consultation position is that workers should not be able to waive this protection. The government has considered shorter periods, such as seven or ten days, but the proposed safeguard is a 14-day period unless the final regulations provide otherwise.

This is different from the period given to consider a settlement agreement before signing. The cooling-off period would apply after the agreement has been entered into.

4. The agreement must relate only to past incidents

An excepted agreement would only be available where it concerns an incident or alleged incident that has already happened.

An employer could not use an NDA to prevent a worker from reporting or discussing harassment or discrimination that might take place in the future. This is particularly important for confidentiality wording contained in employment contracts or staff handbooks before any dispute has arisen.

A clause seeking to prohibit disclosure of future misconduct would not qualify for the proposed exception.

5. The worker must receive a written, accessible copy

The worker must be given a copy of the agreement in writing and in an accessible format.

This should enable the worker to check:

• What incidents are covered;
• Which disclosures remain permitted;
• The duration of the confidentiality obligation;
• The cooling-off procedure; and
• The consequences of withdrawal or breach.

Accessibility may require adjustments such as large print, an electronic format compatible with assistive technology or another format suitable for the worker.

Permitted disclosures will still be protected

Even where an agreement satisfies the conditions for an excepted agreement, the worker will retain the right to make certain permitted disclosures.

The consultation proposes that disclosures should remain possible to bodies and individuals including:

• Law enforcement agencies, such as the police;
• Regulators;
• A qualified lawyer;
• A trade union representative;
• Relevant professional or medical advisers;
• Victim-support organisations; and
• Close family members for support.

The final regulations will specify the people, organisations and purposes covered. An NDA should not be drafted or interpreted as preventing a worker from reporting a crime, cooperating with an investigation or obtaining legal advice.

A worker who has signed an NDA should therefore not assume that they are prohibited from speaking to their solicitor, a regulator or the police. The precise circumstances still matter, and legal advice should be obtained before making a disclosure where there is uncertainty.

How will the 14-day cooling-off period work?

The proposed cooling-off period will change the timing of settlement negotiations.

At present, parties often aim to sign a settlement agreement quickly once the key terms have been agreed. Employers may set a deadline for acceptance, although the worker should be given a reasonable opportunity to consider the offer and obtain independent advice.

Once the new rules apply, an employer could not rely on same-day signature pressure to create a valid excepted agreement. The agreement would need to allow the worker to withdraw within the required period.

This creates practical issues where confidentiality forms part of a wider settlement. For example, a settlement agreement may include:

• Compensation;
• An agreed termination date;
• Payment in lieu of notice;
• An agreed reference;
• Waiver of employment claims; and
• Confidentiality obligations.

If the worker withdraws from an excepted agreement, the effect on the wider settlement will need to be considered carefully. The government consultation recognised that withdrawing from confidentiality provisions may, in some circumstances, affect the wider agreement.

Employers and employees should therefore avoid treating the cooling-off period as a minor administrative step. It may affect the timing of tribunal hearings, payment arrangements and the final resolution of a dispute.

What employers should do now

Employers should review settlement agreement templates before the new rules commence.

Particular attention should be given to:

• Broad confidentiality clauses;
• Non-disparagement and non-derogatory provisions;
• Clauses covering complaints, grievances or investigations;
• Restrictions on contacting regulators or law enforcement;
• Provisions concerning colleagues or third-party harassment; and
• Any wording that attempts to cover future conduct.

A standard clause may become unenforceable to the extent that it prevents disclosure about relevant harassment or discrimination. Relying on a void provision may create further legal and reputational risks, particularly if a worker is threatened with enforcement action for making a disclosure that the law protects.

Employers should also prepare a process that allows sufficient time for:

1. Independent advice;
2. Written confirmation of the worker’s preference;
3. Completion of the agreement;
4. Delivery of an accessible copy; and
5. The cooling-off period.

The final regulations should be checked before new templates are introduced, because the consultation proposals may change.

What employees should check before signing

If you are offered a settlement agreement containing an NDA, do not assume that every confidentiality obligation is enforceable.

Ask:

• What information is the clause intended to cover?
• Does it refer to harassment, discrimination or workplace complaints?
• Does it attempt to restrict discussion of the employer’s response?
• Does it cover future conduct?
• Does it clearly preserve permitted disclosures?
• Have you received independent legal advice in writing?
• Have you been given a complete and accessible copy?
• Is the proposed cooling-off right included?

You should also consider the wider settlement. An NDA may be only one section of a document that waives valuable employment claims. Independent advice can help you understand the compensation offered, the claims being waived, the tax position, references, restrictive covenants and the consequences of withdrawing.

Tyndel Solicitors advises both employees and employers on the negotiation and review of settlement agreements. You can find more information on our employment law services or contact us to discuss your circumstances.

When will the new rules apply?

Section 202A has been introduced by the Employment Rights Act 2025, but the practical operation of the protection depends on commencement arrangements and detailed regulations.

The government has indicated that the NDA restrictions are expected to apply in 2027. The exact commencement date has not yet been confirmed.

The provisions are intended to apply to agreements entered into after commencement. An agreement signed before the relevant commencement date will not automatically be affected retrospectively by section 202A.

That does not mean every existing NDA is necessarily enforceable. Other rules may already restrict confidentiality provisions, including protections for whistleblowing, reporting criminal conduct and obtaining legal advice. The wording and circumstances of each agreement must be considered separately.

The government consulted on the proposed regulations in 2026. Employers and workers should confirm the final regulations and commencement date before signing an agreement that deals with harassment or discrimination.

Frequently asked questions

Does section 202A ban all NDAs?

No. It targets confidentiality provisions that prevent workers from speaking about relevant harassment or discrimination. NDAs protecting unrelated commercial information may remain valid.

Will the changes apply to settlement agreements?

Yes. The legislation is drafted broadly enough to cover agreements between an employer and worker, including settlement agreements. The proposed regulations are also intended to address Acas COT3 agreements.

Can an employer prevent a worker from reporting a crime?

An NDA cannot lawfully prevent a person from reporting criminal conduct to the police or cooperating with law enforcement. The new rules are intended to reinforce these protections.

Can a worker waive the 14-day cooling-off period?

The government consultation proposed that the cooling-off period should be mandatory and non-waivable. The final position must be checked once the regulations are published.

Are agreements signed before commencement affected?

The new section 202A regime is intended to apply to agreements entered into after commencement, not retrospectively. Existing agreements may still be subject to other legal restrictions.

Should I obtain advice before signing a settlement agreement?

Yes. A settlement agreement usually waives potential employment tribunal and court claims. Independent advice is essential to understand the agreement, the confidentiality wording and your available options.

This article is for general information and does not constitute legal advice. The detailed regulations and commencement date should be confirmed before action is taken.