Every lawyer who has ever resolved an employment dispute between an employer and an employee has thought about “it” when evaluating terms of a settlement agreement. In these circumstances, “it” is a nondisclosure agreement (or NDA) which, after signing, largely governs what the parties can say about a case. Confidentiality clauses, while no stranger to employment law issues, has its origins in business disputes. In business, NDAs have been used to protect confidential, sensitive, and proprietary company information from improper disclosure. Over the years, however, NDAs have also been used by high profile individuals like athletes, presidents (see here), politicians, and business leaders when settling sexual assault and sexual harassment claims. Defendants want an NDA to prevent unproven (but likely scandalous) allegations from seeing the light of day. Victims will often agree to an NDA as it helps increase settlement value. It would seem like a win-win for all involved.

After years of misuse, though, NDAs, and their wicked first cousin, the nondisparagement clause, have come under fire for silencing sexual assault victims. As a result of the #MeToo movement, the legal landscape has fundamentally altered how NDAs are enforced, if at all. “Instead of protecting trade secrets as it was initially intended, abusive use of NDAs silence employees and covers up serious and systemic misconduct,” according to New York Sen. Kirsten Gillibrand. Gillibrand introduced legislation in July 2022 to ban the use of NDAs.

Get Up, Stand Up. Stand Up for Your Rights: The Speak Out Act

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]