When it comes to drafting a comprehensive settlement agreement following the departure of an employee, you’ll want this legally-binding contract to be as watertight as possible. Cue, gagging clauses.
To help you determine whether it’s worth including gagging clauses in settlement agreements, the expert solicitors at Freeman Jones Solicitors explain the purpose of a gagging clause and how they’re often used in settlement agreements.
What is the meaning of ‘gag clause’?
In a settlement agreement, a gag clause, also referred to as a confidentiality clause, NDA (non-disclosure agreement), or gagging order, is simply a way of helping to prevent or limit the way confidential or sensitive information is disclosed, used, or shared.
These clauses are common in settlement agreements and are often used to help prevent business trade secrets (or in fact any information gained from working at the business) from becoming public knowledge.
Another reason they’re often included in these contracts is to help stop previous employees from discussing their settlement agreement with existing employees. However, it may be possible to allow the disclosure of certain information if the party has received prior written consent from the other party.
While they are often included at the behest of the employer, they can also be written into the agreement at the request of the employee. It’s worth bearing in mind, however, that the exact extent and contents of gagging orders in settlement agreements are dependent on both the case and employer.
Are gagging orders legal?
Yes, in the UK gagging orders in settlement agreements are perfectly legal, common, and enforceable. If the terms of this order are breached, the wronged party may be able to bring a claim against you for breach of contract. They could decide to seek compensation by taking you to Employment Tribunal or County Court.
However, if you have a ‘reasonable’ belief that a wrongdoing has either occurred or is likely to occur, the disclosure of any relevant information could be covered as a ‘protected disclosure’.
Gagging clauses in settlement agreements
Regardless of whether you’re an employer or employee, gagging clauses can be crucial. For expert support with creating and including comprehensive gagging clauses in settlement agreements, please don’t hesitate to contact our experienced team of solicitors today.
Here at Freeman Jones Solicitors, we can provide you with tailored professional legal advice regarding a wide range of settlement agreement topics. Ultimately, we’re here to help you to protect your company’s reputation by ensuring, where necessary, that suitable gagging clauses are included in these legally-binding contracts.
Our settlement agreement services include providing support with both drafting and negotiating settlement agreements as well as explaining complex legal jargon in a way that’s easy to understand. If you’d like to find out more about our settlement agreement services and fees, why not reach out to our team today?
You can either give us a call on 01244 506 444, send your enquiry via email to info@fjsolicitors.co.uk, or head online to book your free, no-obligation, 20-minute consultation.
Searching for a knowledgeable and reliable solicitor in the North West of the UK? With Freeman Jones Solicitors branches in Chester, Liverpool, Warrington, and Wrexham, you’re never too far from your nearest office, so please feel free to pay us a visit!
