For years, the non-disclosure agreement (NDA) has been a common feature of workplace sexual harassment settlements, with the idea being they can be used to protect the affected person’s privacy.

However, they’ve also come under growing scrutiny for the role they can play in silencing victim-survivors, prioritising the protection of organisational reputation, and preventing organisations from recognising patterns of harmful behaviour.

That scrutiny has intensified with new laws in Victoria restricting the use of NDAs in workplace sexual harassment matters. The changes, which came into effect on 1 July 2026, are designed to give greater control over confidentiality to the person who experienced the harassment.

But, while the Victorian reforms may be significant, they also raise a much broader question for employers across Australia: when a workplace sexual harassment complaint is settled confidentially, has the organisation actually resolved the problem or simply resolved the complaint?

An NDA designed to protect an organisation from risk can sometimes have the opposite effect. It can prevent the organisation from seeing the risk at all.

Why NDAs became commonplace in workplace harassment matters

There are legitimate reasons why confidentiality has become a common feature of workplace sexual harassment settlements.

The last thing a person making a complaint often wants is for colleagues, future employers or others knowing the details of what happened. Confidentiality can also provide a sense of closure and allow people to move on without having to repeatedly revisit an upsetting experience.

For employers, non-disclosure agreements can help bring disputes to a definite end, reducing the risk of further litigation, protecting sensitive personal information and providing certainty about what can and can’t be said once the matter is resolved.

In that sense, confidentiality is not inherently problematic. In some cases, it may be exactly what the person affected wants. The difficulty arises when confidentiality becomes routine or when it is imposed primarily to protect the organisation rather than the individual.

Also, what reduces an organisation’s immediate legal or reputational exposure may also make it harder to understand its longer-term impact on people and cultural risks.

That’s where an NDA can shift from an instrument for protecting privacy to one that reinforces silence, while also exposing the organisation and its other employees to increased risk.

What Victoria has changed under its new NDA restrictions

Victoria’s new laws place significant restrictions on the use of NDAs in workplace sexual harassment matters.

The key change is that confidentiality can no longer simply be imposed by an employer as a standard condition of settlement. In most cases, the person who experienced the harassment must initiate the request for an NDA. The agreement must also reflect their genuine preference.

The reforms also introduce safeguards designed to make sure that the decision to sign an NDA is informed and voluntary. Employers can’t pressure a complainant into accepting confidentiality. The legislation also preserves that person’s ability to make certain disclosures, including to legal and health professionals and others providing support.

In effect, these reforms shift the starting point. Instead of asking whether an employer can require confidentiality, the focus is increasingly on whether confidentiality is what the person affected actually wants.

That means an NDA might still be appropriate where it protects a complainant’s privacy and gives them greater control over what happens next. But it becomes much harder to justify when its main purpose is to protect the organisation from embarrassment or scrutiny.

Why NDAs can create risks for employers too

Victoria might be the first Australian jurisdiction to significantly restrict the use of non disclosure agreements in workplace sexual harassment matters, but the broader shift against the use of NDAs is already national.

Since December 2022, Australian employers have operated under a positive duty to take reasonable and proportionate steps to eliminate workplace sexual harassment, sex-based harassment and related conduct as far as possible.

This is a preventative duty that requires them to think about workplace culture, risk factors, reporting mechanisms and patterns of behaviour before problems escalate. It is not enough to respond only once someone makes a complaint.

And that has important implications for the way organisations use confidentiality.

An employer may be able to settle an individual complaint and keep the details private. But if the process also prevents it from identifying repeat behaviour, understanding cultural problems or learning where its systems have failed, it is effectively resolving the dispute without addressing the risk.

It is this broader duty to prevent harassment in the first place, that all employers should consider before using NDAs.

In this regard, a complaint isn’t simply a problem to resolve. It is also a piece of risk intelligence.

From complaint resolution to organisational learning

That’s why one of the dangers of treating sexual harassment purely as an individual complaint is that it can obscure the bigger picture.

A complaint should not only prompt questions about what happened between the people directly involved. It should also encourage the organisation to look more broadly at the circumstances that allowed the behaviour to occur in the first place.

Was this genuinely an isolated incident? Have similar concerns been raised before, formally or informally? Are there particular teams, managers or working environments where the risk is higher? Do employees feel confident reporting inappropriate behaviour? And, importantly, does senior leadership have enough visibility over complaints to identify patterns when they emerge?

None of this requires anyone to disregard a complainant’s privacy. Organisations can protect sensitive personal information while still learning from what happened.

What you should be doing now as an employer

For employers, Victoria’s changes to the rules around the use of NDAs should offer a good reason to review how workplace sexual harassment complaints are handled within the organisation.

To do this, begin by looking at whether confidentiality clauses are being used routinely or only when there’s a clear reason for them. Consider who’s proposing confidentiality, how broad the clause is, and whether it genuinely reflects what the person affected wants.

You should also make sure that settling an individual complaint doesn’t prevent the organisation from learning from what happened. Complaints should feed into broader risk management, including identifying recurring behaviour, cultural problems, weaknesses in reporting processes and areas where managers may need more support or training.

It’s also important to consider what information is reaching senior leadership. For example, individual identities and sensitive details may need to remain confidential, but you still need enough visibility over trends and patterns to understand where risks are emerging.

Finally, and perhaps most importantly, avoid treating settlement as the end of the complaint process.

Because while resolving a complaint is important, so too is understanding why it happened, what it says about the workplace, and what needs to change to reduce the risk of it happening again.

Conclusion

Victoria’s new laws may have brought renewed attention to the use of NDAs, but the broader issue extends well beyond one state.

Across Australia, employers are already expected to take a preventative approach to workplace sexual harassment. That means looking beyond the resolution of individual complaints and considering what those complaints reveal about culture, systems and risk.

Confidentiality can still have an important role to play, particularly where it is genuinely what the person affected wants. But it should not become a mechanism for making uncomfortable problems disappear.

Because while an NDA may bring a dispute to an end, it cannot by itself prevent the next one.

Want more?

Managing workplace complaints effectively means looking beyond the immediate incident to understand the people, cultural and organisational risks behind it.

Catalina Consultants helps organisations build healthier workplaces, strengthen leadership capability and manage complex people issues.

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