Confidentiality and resolving employment disputes: time to reassess the default?
A confidential settlement agreement under section 149 of the Employment Relations Act 2000 is a familiar tool for employers. Once signed by the parties and certified by a mediator, it is final, binding and enforceable, and proceedings cannot be bought in relation to the terms except for enforcement. Confidentiality obligations are not legally required, but in practice, are the default setting.
That is not necessarily wrong or controversial. Confidentiality often serves legitimate purposes for both employers and employees. It can help parties resolve disputes quickly, protect privacy, avoid unnecessary reputational damage, and allow the parties to move on. The harder question is whether employers (and their advisors) have become too accustomed to the default setting of confidentiality, drafted in broad terms, even in cases involving allegations of bullying, harassment, discrimination or other conduct with public-interest implications.
Recent media reporting involving complaints of misconduct within high profile businesses, such as award-winning Arrowtown restaurant Amisfield, raise an important question about whether confidentiality should be the default setting.
Amisfield received complaints regarding alleged misconduct by former executive chef Vaughan Mabee, including allegations of bullying, lewd comments, verbal abuse and physical aggression. An independent investigation was undertaken and Mabee resigned in February 2026. RNZ reported that Amisfield said earlier complaints had resulted in formal written warnings, and the more recent complaints led to his removal from the workplace while an independent investigation was carried out.
It is not clear under what circumstances the complainants were dealt with. However, if this was a scenario where employee complaints were resolved through records of settlement, with mutual confidentiality obligations attached, such scenarios raise a legitimate question about whether the use of blanket confidentiality clauses is appropriate, if the result is that inappropriate behaviour continues unchecked. Where complaints are resolved by agreement but are subject to confidentiality obligations regarding the resolution and the background, the outcome remains opaque, the employee may be unable to talk about their experience without breaching of the confidentiality obligations, and there is therefore a real risk that patterns of conduct stay hidden. That is particularly troubling where the alleged conduct goes not just to interpersonal conflict, but to safety, abuse of authority, or professional fitness.
In the UK, steps have been taken to improve the settings regarding confidentiality clauses. In 2018, the Solicitors Regulation Authority (SRA) (the regulatory body for solicitors in the UK) issued a warning notice to solicitors about the professional obligations associated with advising on the use of non-disclosure agreements.[1] The SRA explains that lawyers must not use confidentiality terms to prevent, impede or deter a person from reporting offences to law enforcement, reporting misconduct to a regulatory body, making a protected disclosure, or making any disclosure required by law. In short, the SRA’s position is that a non-disclosure agreement and/or confidentiality may sometimes be justified, but it must be tailored, lawful, and used with care.
The New Zealand Law Society has not issued equivalent guidance, but there is merit in an approach requiring express carve-outs to preserve disclosures required by law, reports to police or regulatory bodies, protected disclosures, and communications with legal advisers, tax advisers, medical professionals, counsellors, and a support person or immediate family members on a confidential basis.
It’s worth noting that New Zealand law already imposes limits on confidentiality in some circumstances and recognises that not all confidentiality interests are created equal. For example, the Protected Disclosures (Protection of Whistleblowers) Act 2022 provides that a protected disclosure can be made despite any agreement, contract, or internal procedure that appears to prohibit the disclosure, require the person to withdraw it, or otherwise contract out of the Act. There are restrictions in regulated professions. Schools have mandatory reporting obligations relating to teachers in a range of circumstances, including serious misconduct, dismissal, resignation after conduct or competence concerns, and complaints received after departure. Similarly, in the legal profession, law firms must notify the Law Society where someone receives a written warning or is dismissed for bullying, discrimination, harassment, racial harassment, sexual harassment, theft or violence, and must also report if a person leaves before an investigation is completed.
What, then, should employers be considering when it comes to confidentiality obligations in a record of settlement? There is merit in employers proactively scrutinising what confidentiality obligations are genuinely necessary in the circumstances and the legitimate interests those obligations are intended to protect. There may be cases where the right answer is no confidentiality clause at all, or otherwise one that is appropriately narrow and tailored to the specific facts of the case. For example, confidentiality regarding the existence and terms of settlement might be justifiable and necessary, but restricting discussion of the circumstances leading up to the settlement might not be if it prevents or deters an employee from making proper disclosures to a regulatory body or a professional advisor. Every case will be different and a “one size fits all” approach to confidentiality risks ignoring that reality.
Records of settlement are an important tool for resolving employment disputes, but recent developments invite reflection on why employers should pay more attention to confidentiality, particularly where the background involves conduct that may have implications beyond the immediate employment relationship.
[1] SRA | Use of non-disclosure agreements (NDAs) | Solicitors Regulation Authority
Special thanks to Partner Alastair Espie, Special Counsel Matt Harrop and Solicitor Holly Kerr for preparing this article.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
