Void NDAs/Confidentiality Clauses 

Any purported NDA, on its own or as a clause in a severance agreement, between an employer and employee shall be void where such NDA/clause prohibits the employee from disclosing the following:

An allegation that an employee has experienced discrimination, harassment, sexual harassment or victimisation regarding his/her employment, or

Any action taken by an employer or employee in response to the making of such an allegation, including any proceedings taken by the employee.

This restriction only applies in relation to the abovementioned scenarios. Therefore, NDAs/confidentiality clauses in severance agreements can still be used where there is no allegation by an employee that he/she has experienced discrimination, harassment, sexual harassment or victimisation.

However, in any situation where a settlement with an employee is being negotiated, and there are allegations of discrimination, harassment, sexual harassment or victimisation in the background or otherwise, the 2024 Act will apply to any agreement negotiated.

Valid NDAs/Confidentiality Clauses

There are limited exceptions under the 2024 Act where NDAs/confidentiality clauses in a severance agreement remain permissible, valid and enforceable in the abovementioned scenarios.

They remain permissible where the NDA:

i. was entered into as part of a WRC Mediation, or

ii. is an “excepted” NDA for the purpose of the 2024 Act. An excepted NDA is defined in the 2024 Act as follows:

a. the employee must request the NDA, and

b. prior to entering into the NDA, the employee must have received independent legal advice in writing.

The 2024 Act also provides that the employer shall pay the reasonable legal fees incurred by the employee in getting this written legal advice.

It is worth noting that the new legislation also makes it clear that an excepted NDA shall:

(a) be in writing,

(b) be of unlimited duration (other than where the employee elects otherwise),

(c) be in clear language that is easily understood and a format that is easily accessible by the parties (including any party with a disability),

(d) provide the employee with a right to withdraw from the agreement without penalty within 14 days from the date of entry into the agreement, and

(e) include a provision stating the agreement does not prohibit the employee making a relevant disclosure to an Garda Síochána, a legal practitioner, a registered medical practitioner, a mental health professional, Revenue, the Ombudsman, a trade union officer or any other individual as agreed by the parties.

Commentary

The 2024 Act places significant restrictions on the contractual autonomy of private parties, particularly employers, surrounding NDAs and confidentiality clauses in severance agreements relating to allegations of discrimination, harassment, sexual harassment and victimisation. This legislative development is very much pro-employee.

The “excepted” NDA provided for under the 2024 Act provides scope, albeit limited, for such NDAs and confidentiality clauses to remain valid. Employers ought to be aware of this development and bear the changes in mind when considering NDAs and severance agreements where an allegation of discrimination, harassment, sexual harassment or victimisation has been made going forward.