What Is a Confidentiality Clause?
A confidentiality clause — sometimes formalised as a Non-Disclosure Agreement (NDA) — restricts what one or both parties can disclose about certain information obtained during a business relationship. In employment contracts, confidentiality obligations are often implied by law even without an express clause. In commercial and pre-contractual relationships, an explicit clause is the primary protection.
What Qualifies as Confidential Information?
Not everything called "confidential" in a contract will be treated as such by a UK court. For information to attract legal protection, it must genuinely have the quality of confidence — meaning it is not already in the public domain, it was communicated in circumstances importing an obligation of confidence, and its disclosure would be detrimental to the disclosing party.
Overly broad definitions — such as "all information received in any form" — are common in poorly drafted NDAs but may be unenforceable in their full scope. Courts will assess whether the information genuinely warranted protection.
How Long Can Confidentiality Obligations Last?
Unlike non-compete clauses, confidentiality obligations can in principle last indefinitely — but only for genuine trade secrets. For general business information, courts expect the obligation to be time-limited. In employment contracts, post-termination confidentiality obligations that go beyond protecting genuine trade secrets and seek to prevent employees from using their general skills and knowledge may be challenged as an unreasonable restraint of trade.
NDA Limitations Under UK Law
UK NDAs cannot lawfully prevent disclosure of information to the police, regulatory bodies, or in the context of legal proceedings. Since 2023, NDAs cannot be used to prevent disclosure of information about workplace sexual harassment, discrimination, or whistleblowing matters — these rights are statutory and cannot be contracted out of.
Red Flags in Confidentiality Clauses
- No definition of confidential information — or a definition so broad it captures publicly available material
- No carve-out for information already in the public domain or independently developed
- No carve-out for legally required disclosure
- Perpetual obligations on general business information rather than genuine trade secrets
- One-sided obligations — you are bound but the other party is not
- No requirement to notify the disclosing party before making a compelled disclosure
Negotiating a Confidentiality Clause
Insist on a precise definition of what constitutes confidential information. Push for standard carve-outs: public domain information, independently developed information, and legally required disclosures. For employment contracts, ensure post-termination obligations are limited to genuine trade secrets and set a time limit on general business information. If the NDA is mutual in form, check that the obligations are genuinely equivalent for both parties.