Workers who sign gagging orders in return for pay-offs from their firms will still be able to report wrongdoing to the police under new proposals.
The government has said it will bring in legal measures to protect workers from the misuse of non-disclosure agreements (NDAs).
It wants to enshrine in law that people cannot be prevented from reporting crimes, harassment or discrimination.
Topshop boss Sir Philip Green has been at the centre of controversy over NDAs.
It emerged in October last year that the businessman had used them to buy the silence of at least five members of staff who accused him of sexual and racial harassment.
Last month, Sir Philip abandoned legal action against the Daily Telegraph newspaper, which had first reported the allegations against him.
The government's measures, announced by Business Minister Kelly Tolhurst, also include extending the law to ensure that workers agreeing to NDAs receive independent advice on their limitations.
"Many businesses use Non-Disclosure Agreements and other confidentiality agreements for legitimate business reasons, such as to protect confidential information," said Ms Tolhurst.
"What is completely unacceptable is the misuse of these agreements to silence victims, and there is increasing evidence that this is becoming more widespread.
"Our new proposals will help to tackle this problem by making it clear in law that victims cannot be prevented from speaking to the police or reporting a crime and clarifying their rights."