A recent EAT decision highlights that employers should consider expressly stating that a confidentiality clause in a COT3 or settlement agreement is a condition and/or requiring the repayment of an appropriate amount in the event of breach, particularly if confidentiality is of key importance to the employer.
In Duchy Farm Kennels v Steels, the High Court ruled that in the absence of such express wording, and given that the only risk created by a breach was a low risk of other employees bringing 'copycat' claims, a generic confidentiality clause could not be treated as an implied condition (which would have relieved the employer of its obligations to pay any outstanding sums under the agreement). The employer was therefore still required to pay the remaining instalments of the agreed settlement sum, notwithstanding that the former employer had disclosed the settlement amount to another former employee in breach of the confidentiality clause.
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