By Nic Hart
The High Court have held in Duchy Farm Kennels v Steels that an employer cannot avoid paying out on a settlement where an employee is in breach of a confidentiality clause, unless confidentiality is genuinely a condition of the agreement.
Here, the employer agreed to pay the employee a settlement sum in instalments in full and final settlement of the employee’s employment tribunal claims. The COT3 agreement also included:
- a clause under which the parties agreed to treat the fact of and the terms of the agreement as strictly confidential (‘the confidentiality clause’); and
- a warranty that the employee had not previously disclosed the facts and terms of the agreement to any other person.
The employer subsequently did not pay the final instalment, and the (now former) employee issued proceedings for payment. The employer sought a declaration that the sums were no longer recoverable on the basis of breach of the confidentiality clause in the agreement. Continue reading “High Court Rules On The Effect Of Confidentiality Clauses In A Settlement Agreement”