Breach Of Confidentiality Clause Did Not Entitle An Ex-Employer To Stop Making Payments Under A COT3 Agreement

• Published date: 12 June 2020
• Author: Mr Michael Crowther
• Law Firm: Wrigleys Solicitors

Decision highlights the limits of a generic confidentiality clause in settlement agreements.

When using settlement agreements, employers are primarily concerned to settle any actual (or potential) employment tribunal claims in exchange for payment. Depending on the circumstances, employers may also be keen to keep the existence and details of such settlements confidential, perhaps because of reputational risks and / or because of the risk that other employees will be encouraged to bring claims against the employer.

However, most settlement agreements contain confidentiality clauses as standard, whether or not confidentiality is among the chief concerns of the parties.

It is a common misconception that breach of a confidentiality clause contained in a settlement agreement automatically entitles an employer to recover, or cease paying, sums due under a settlement agreement. As highlighted by a recent decision of the High Court, the options available to an employer in these circumstances will vary depending on the importance placed on confidentiality by the parties.

Case details:Duchy Farm Kennels Limited v Steels [2020]

Mr Steels brought a number of claims in the Employment Tribunal against DFK, including unfair dismissal. A settlement was negotiated with the...