What confidentiality responsibilities come with signing a compromise agreement?

A confidentiality clause is frequently used in compromise agreements and they can vary in their breadth and complexity. Some examples of what confidentiality clauses may cover are set out here.

- Confidentiality of the compromise agreement itself. A confidentiality clause may cover the terms contained in the compromise agreement. In this case, you are permitted to tell people that you have entered into a compromise agreement but you cannot disclose the agreed terms, such as the amount of the payment you received, or the details of your claim against your employer.
- Confidentiality of business information. A confidentiality clause may specifically prohibit you from sharing certain information used, or available to you, in the course of your employment.
- Non-derogatory statements clause. A compromise agreement may contain a non-derogatory statements clause which prohibits you from making negative statements about your ex-employer or about fellow colleagues or ex-colleagues. Such a clause could be mutual, so that the employer cannot make negative statements about you either.

Another related type of clause is:

- Restraint of trade clause. A restraint of trade clause purports to restrict the type of employment or business activity that an employee can enter into following the termination of the employment relationship. For example, it may prohibit a person from working for a similar business within a certain time period. These clauses are void for illegality unless they protect a legitimate interest of the ex-employer, and extend no further than is reasonably necessary to protect that interest.

If you are concerned about how a confidentiality or restraint of trade clause applies to you, you should obtain legal advice from an employment lawyer. It is important to note that under employment law a compromise agreement will not be legally binding unless the employee has received independent legal advice from an employment lawyer.

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