Settlement Agreement – What Confidentiality Obligations will be Imposed? (Part 8)

It is usual for the employer to require the employee to keep certain information confidential as a condition of the agreement. Confidentiality clauses in employment settlement agreements are meant to protect the employer's sensitive and proprietary information from being disclosed to unauthorized parties.

Some common types of confidential information that may be protected by a confidentiality clause in an employment settlement agreement include:

• Trade secrets: Information that is not generally known and has commercial value, such as business plans, financial information, customer lists, and other proprietary information.
• Proprietary information: Information that is owned or controlled by the employer and is not generally known to the public, such as inventions, software, and other intellectual property.
• Personal information: Information about employees, customers, and other individuals that is protected by privacy laws, such as names and addresses.
• Business information: Information about the employer's operations, such as financial information, marketing plans, and other confidential business information.

It is common for the confidentiality clause to have no end date, which means the employee must keep the information confidential even after the employment ends, unless it comes into the public domain (provided the employee was not responsible for putting into the public domain).

The employee will typically not be able to discuss the terms and effects of the settlement agreement beyond family members and professional advisers (provided they also keep it confidential). The employer will also keep the terms of the settlement agreement confidential and may discuss it with their own professional advisers.

If you have any questions concerning a settlement agreement, please contact Noel McNicholas on 01926 887700 or noel.mcnicholas@thomasflavell.co.uk.