A non-disclosure agreement (NDA), also called a confidentiality clause, is a legally binding promise not to share certain information. If you break it, the other side can sue for breach of contract and a court can award compensation. But an NDA can't lawfully stop you whistleblowing, reporting a crime, or discussing pay for equal pay reasons, and in the US a pre-dispute NDA can't silence sexual harassment claims.
NDAs turn up in three places: when you start a job, inside a settlement agreement when you leave, and in business deals. This guide uses Acas's guidance for the UK, the US Speak Out Act and Ontario's employment standards guide.
When NDAs are used
| Situation | Typical purpose |
|---|---|
| Starting a job | Protect confidential information, client identities and intellectual property |
| Settling a dispute | Keep the terms, the circumstances or even the existence of the settlement private |
| During or after employment | Stop critical or insulting comments about the employer, staff, services or clients |
| Business deals | Protect sensitive business information shared during talks |
Acas's example: a new worker at a tech company signs an NDA that stops them giving company information to competitors. That's the classic, lawful use. In a settlement, an NDA can also allow a list of people you can tell, such as a partner or adviser; see our settlement agreement guide.
What an NDA can't stop (UK)
Acas says that, by law, an NDA can't stop someone:
- Whistleblowing.
- Reporting a crime to the police.
- Discussing their pay with anyone at work for reasons relating to equal pay.
- Sharing information about a crime to get advice and support if they're a victim of crime in England or Wales.
And from 6 April 2026, sexual harassment is a 'qualifying disclosure' under whistleblowing law. Whistleblowers who disclose it are protected from detriment and dismissal, even if the harassment or disclosure happened before that date. For employees, being dismissed for it counts as automatic unfair dismissal.
Acas also says an NDA shouldn't be used to stop someone reporting discrimination. Its example: an accountant demoted and told to retire because of age, who felt a blanket NDA ('you must not discuss anything that happens at work with anyone at all') stopped them seeking advice. The employer should have limited it to sensitive business information.
The catch: an unlawful clause doesn't void the whole NDA
This is the detail people miss. If you blow the whistle, the gag can't be used against you for that. But the rest of the agreement may still stand. Acas's example: a worker reports concerns about emissions data despite an NDA, which is protected. If they then sell the same data to a competitor, the employer can sue for breach and a judge could award compensation.
United States: the Speak Out Act
Congress passed the Speak Out Act (Public Law 117-224) in 2022. It says that for a sexual assault or sexual harassment dispute, no nondisclosure or nondisparagement clause agreed before the dispute arose is judicially enforceable where the conduct is alleged to break federal, tribal or state law. It doesn't stop employers protecting trade secrets or proprietary information, and states can keep stronger protections. Clauses signed after a dispute, such as in a settlement, aren't covered by that limit. That's why the timing of an NDA matters as much as its wording in US cases.
Canada (Ontario)
Ontario's Employment Standards Act bans most non-compete agreements, but it doesn't prohibit non-disclosure agreements, which stop employees sharing confidential company information and processes. Their enforceability is a common law question, so Ontario's guide tells people to talk to a lawyer.
What to check before you sign
- Is 'confidential information' defined, or is it everything you ever hear?
- Does it say clearly that you can still whistleblow, report a crime and get legal or medical advice?
- How long does it last? Settlement NDAs often have no end date.
- Who can you tell: is there a list (partner, accountant, adviser)?
- Is it one-way or mutual? In a settlement, ask for the employer to be bound too.
If you use AI tools on client calls, confidentiality cuts both ways; our piece on AI notetakers and NDA risk covers that.
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Special rules for English universities
Acas notes one sector-specific rule that came into effect on 1 August 2025: English universities and other higher education providers can't use a non-disclosure agreement to stop workers disclosing sexual misconduct, abuse or harassment, or other bullying or harassment. If you work in higher education in England, any NDA that tries to cover those subjects won't hold.
If you've already signed a broad NDA
You don't need to tear it up. Use the protected routes the law gives you: report a crime to the police, make a whistleblowing disclosure, or take advice. Acas's hotel example makes the point: a worker asked to keep everything at the hotel secret could still report sexual harassment to HR and the police, and the employer should have made that clear in the wording.
And ask for a copy of what you signed. Many people sign an NDA on day one and can't find it years later, when it matters. Without the wording in front of you, you can't tell whether a clause covers the thing you want to talk about.
The verdict
Treat an NDA as a real contract, because it's one. Sign the reasonable ones, and push back on any that are so broad you couldn't tell your own family or a lawyer what happened at work. A good NDA names what's confidential and says plainly what you can still report. If yours doesn't, ask for that sentence to be added: Acas's guidance says it should be there, and a reasonable employer won't refuse.
Frequently asked questions
Is a non-disclosure agreement legally binding?
Yes. If someone breaks it, the other party can sue for breach of contract and a court could award compensation.
Can an NDA stop you whistleblowing?
No. In the UK, an NDA can't stop whistleblowing, reporting a crime or equal pay discussions, and from 6 April 2026 sexual harassment disclosures are protected.
Can an NDA cover sexual harassment in the US?
Under the Speak Out Act, a nondisclosure clause agreed before the dispute arose isn't judicially enforceable for sexual assault or harassment disputes.
Are NDAs allowed in Ontario?
Yes. Ontario's Employment Standards Act bans most non-competes but doesn't prohibit non-disclosure agreements.
