Why should settlement agreements be confidential?

One of the key clauses within a settlement agreement is the confidentiality provision.

Seek legal advice


It is important that you take legal advice from a specialist employment lawyer on the terms of the confidentiality undertaking that you are providing within the settlement agreement.


This is because in some cases it is possible to have already breached a confidentiality provision prior to signing it and this would give rise to a breach of contract that may be made against you.


In many cases, confidentiality undertakings are offered only by employees. This is unreasonable and individuals should seek advice from their lawyers to ensure that the confidentiality undertakings given within a settlement agreement are mutual in other words the employer is also agreeing to maintain a duty of confidentiality in relation to the agreement itself and the circumstances leading up to it.



It is important that settlement agreements remain confidential because the discussion around them may be detrimental to individuals in relation to securing future employment. In this respect, it is also important for individuals to ensure that they obtain a positive reference from their employer to be provided to prospective employers in due course.

Are they confidential?


Settlement agreements are without prejudice until they are signed by all parties when they become binding contracts. If you have questions regarding your agreement, search and seek advice from settlement agreement solicitors near me.


Without prejudice means off the record and as such the settlement agreements are confidential and remain separate from any formal open procedure until they are signed by all parties when they are open and binding contracts. 


However, even after signature, agreements often contain strict confidentiality undertakings which prevent the parties from discussing the circumstances leading up to the agreement or the terms of the agreement itself with any third party.


Settlement agreements contain provisions preventing the employee from making disclosures concerning the settlement agreement but also the employee should request a similar cross-undertaking provided by the employer to ensure that the employer cannot disclose details of the agreement to any third party.


As well as confidentiality provisions settlement agreements often contain non-derogatory statements undertakings. These clauses prevent either party from making statements which are derogatory either verbally or in writing about the other.