An Employee Confidentiality Agreement (also known as an Employee NDA or Employee Non-Disclosure Agreement) is a legally binding contract between an employer and an employee, governed by the laws of England and Wales, that imposes express contractual obligations on the employee to protect the employer’s confidential information and trade secrets both during and after employment. It is one of the most widely used legal instruments for protecting commercially sensitive information in the UK employment context.

Every employment relationship in England and Wales carries an implied duty of fidelity under common law, which requires the employee to act in good faith, to not misuse confidential information, and to not compete with their employer during employment. This implied duty provides useful protection during the employment relationship, but it has significant limitations once the employee leaves. The landmark Court of Appeal decision in Faccenda Chicken Ltd v Fowler [1987] Ch 117 established the critical distinction that underpins modern English employment law: while the implied duty protects all confidential information during employment, after termination it only extends to information that has the character of a trade secret. General confidential information — such as pricing structures, client preferences, supplier terms, and operational procedures — loses the protection of the implied duty once the employment relationship ends. This is the gap that an Employee Confidentiality Agreement is designed to fill.

The legal landscape for employee confidentiality in England and Wales has been shaped by several major statutory developments in recent years. The Trade Secrets (Enforcement, etc.) Regulations 2018 (S.I. 2018/597), which implemented the EU Trade Secrets Directive into domestic law and remain in force following Brexit, introduced a statutory framework for the protection of trade secrets that supplements and strengthens the existing common law of breach of confidence. The Regulations provide a precise statutory definition of what constitutes a trade secret and give employers access to enhanced remedies — including statutory damages, delivery up of infringing materials, and publication of the judgment — that were not previously available at common law.

Equally important is the statutory framework governing what an Employee NDA cannot do. Under section 43J of the Employment Rights Act 1996 (as inserted by the Public Interest Disclosure Act 1998), any contractual term that purports to prevent a worker from making a protected disclosure is void and of no legal effect. A protected disclosure — commonly known as whistleblowing — is a qualifying disclosure of information that the worker reasonably believes tends to show one of six specified categories of wrongdoing, including criminal offences, failure to comply with legal obligations, health and safety dangers, and environmental damage. Any Employee NDA must contain an express carve-out acknowledging and preserving the employee’s right to make protected disclosures.

From 1 October 2025, the Victims and Prisoners Act 2024 has further restricted the scope of NDAs in England and Wales by providing that any agreement entered into on or after that date cannot prevent a person who reasonably believes they are a victim of criminal conduct from disclosing information about that conduct to specified persons, including law enforcement agencies, legal advisers, healthcare professionals, regulatory bodies, victim support services, and close family members. An Employee NDA that fails to include an appropriate carve-out for these permitted disclosures will be void to that extent.

An Employee Confidentiality Agreement should be used in any employment relationship in England and Wales where the employee will have access to information that the employer has a legitimate interest in keeping confidential — not merely as a matter of business preference, but because the unauthorised disclosure or misuse of that information could cause real commercial, reputational, or competitive harm.

The most important time to introduce a Confidentiality Agreement is at the start of the employment relationship. Asking an existing employee to sign an NDA part-way through employment can give rise to issues of consideration — under English law, a contract must be supported by consideration from both parties to be binding. A new employee provides consideration by virtue of commencing employment, making the start of employment the natural and legally simplest time to introduce a Confidentiality Agreement. If an NDA is introduced mid-employment, additional consideration (such as a one-off payment, a promotion, or access to additional benefits) should be provided.

Employee NDAs are particularly important in technology and software businesses, where the boundary between an employee’s general skill and knowledge (which they are always entitled to use) and the employer’s trade secrets and proprietary code (which they are not) is frequently contested. English courts have consistently held that employees are entitled to take their skills and experience with them when they leave — an Employee NDA must be carefully drafted to protect the employer’s specific confidential information without improperly restraining the employee’s right to work in their field.

In regulated industries such as financial services, healthcare, legal services, and pharmaceuticals, Employee NDAs are often expected as part of standard employment practice. The Financial Conduct Authority and other regulators expect firms to have appropriate information barriers, and regulators may scrutinise whether a departing employee had effective confidentiality obligations in place.

Employee NDAs are also critical in merger and acquisition contexts, where key employees may be privy to confidential deal information before any transaction is announced, and in product development contexts, where the employer’s research and development pipeline must be protected from early disclosure. For senior executives and board members, an Employee NDA combined with a garden leave provision is often the most effective tool for managing the transition period and reducing the risk of sensitive information being used by a competitor.

A well-drafted Employee Confidentiality Agreement for use in England and Wales must contain a comprehensive set of provisions that reflect the specific legal framework governing employment relationships in this jurisdiction.

The definition of Confidential Information is the most important drafting exercise. It must be broad enough to cover all genuinely sensitive business information but specific enough to withstand judicial scrutiny. English courts will not enforce an NDA that is so wide as to catch information that is not truly confidential or that would improperly prevent the employee from using their general professional skills and knowledge after leaving. The definition should expressly reference the statutory definition of trade secrets from the Trade Secrets (Enforcement, etc.) Regulations 2018 and should list specific categories of protected information relevant to the employer’s business.

The obligations during employment clause reinforces the common law implied duty and imposes express contractual obligations that are easier to enforce. It should require the employee to use confidential information only for the purposes of their employment, to implement reasonable information security practices, and to report any suspected breach.

The post-employment obligations clause is the core of the agreement. It should specify a reasonable fixed period for which confidentiality obligations survive termination (typically 12 to 36 months depending on the role and sensitivity of the information), while stating that trade secret obligations continue indefinitely. The duration must be proportionate to the employer’s legitimate interest to avoid the clause being struck down as an unreasonable restraint of trade.

The whistleblowing and permitted disclosures clause is not optional under English law — it is legally mandated. The clause must expressly preserve the employee’s right to make protected disclosures under the Public Interest Disclosure Act 1998 and disclosures permitted under the Victims and Prisoners Act 2024. Any NDA that fails to include this carve-out risks being void to the extent that it conflicts with these statutory rights.

The return of materials clause, garden leave provision (for senior employees), liquidated damages clause, and remedies clause complete the agreement. The governing law clause should confirm England and Wales jurisdiction.