NDA INFORMATION
Please note that this information is for public education, it does not constitute legal advice.
The above video explains what NDAs are and how they are misused.
HAVE YOU SIGNED AN NDA?
If you have already signed and NDA and regret it, it is important to know that a large proportion of NDAs are unenforceable and are documents that rely on the threat and fear of retaliation. The guilty party is unlikely to want to cause publicity by suing you if you contest your NDA. However, we must stress that we cannot guarantee this.
We have complied a list of actions which may assist you in navigating your NDA experience:
Write your own story (without any personal identifying information) for our “testimonies” page.
SHARE YOUR STORY
Assert your support for the ban of NDAs. Tell your government representative about the stifling abuse and prevalence of NDAs.
INFORM YOUR MEMBER OF PARLIAMENT
Consider asking the other side to release you from your NDA. We have provided a template letter to help you to do this.
ASK FOR A RELEASE
ENGAGE WITH YOUR UNION
Tell your union representative about your dissatisfaction with the NDA and request the union to avoid future NDA compromises. Encourage education and safeguards for union members.
RECLAIM YOUR POWER, CHALLENGE COERCION
We want to highlight how detrimental NDAs are, when coerced on people. Bad publicity will make enforcing your compliance unappealing for organisations supporting NDAs. NDAs signed under duress or without comprehension of legal language and consequences can be challenged in court.
Telling your lawyer you regret your NDA agreement is not a breach of contract. Your lawyer may not realise how much you resent the NDA and how much suffering it has caused you.
INVOLVE YOUR LAWYER
THINKING OF SIGNING AN NDA?
It has become ’standard’ for lawyers to ask for an NDA in settlement or grievance negotiations. But an NDA is NOT a required part of of this process - you do not have to agree and certainly not without thinking through the real consequences of being gagged for ever. The only required clause in a settlement agreement is a “release” that says that you agree not to take legal action with regard to the complaint now or in the future.
NDAS ARE NOT REQUIRED FOR SETTLEMENT
NDAs are not mandatory for a settlement, but for many lawyers they have become the "new normal". You can push back. The employer or institution's goal is to avoid public embarrassment or bad press.
Negotiate for a one-sided confidentiality clause that protects your identity but does not stop you from speaking about your experience to whomever you wish.
PROTECT YOUR IDENTITY
Negotiate for a period to think and consult with others. This is not high pressure sales! You are not required to sign on the spot, but many people feel rushed into agreement.
NEGOTIATE
Negotiate for fewer restrictions in the NDA - for example, communication with family, friends and health professionals or therapists.
THINK AND CONSULT
If you are not comfortable or do not fully understand the NDA, it is always your right to decline. Most cases (95%) will settle anyway, with or without an NDA.
IT IS YOUR RIGHT TO DECLINE
YOU MAY ALREADY BE PROTECTED
If you are in the United Kingdom, you may already be protected by whistleblowing rights. The below video from Protect explains your rights and what ‘protected disclosures’ are under the Employment Rights Act 1966 .
In addition to this the The Victims and Prisoners Bill 2024 means any confidentiality agreement is void if it precludes a victim from speaking to law enforcement; legal; regulatory or therapeutic advice services or family when it is related to criminal conduct.
A non-disclosure agreement or an NDA is a clause in a document that restricts sharing information with others that is designated as “confidential”. This means at minimum the whole agreement and its terms, and sometimes more; for example, the negotiations leading to the resolution, or the underlying circumstances of the complaint or suit.
While any discussion about settlement is “without prejudice”, meaning that those discussions will be inadmissible if there is a future trial, in contrast, an NDA is an agreement to keep the underlying nature of the complaint confidential, and for all time and not just during the negotiations.
An NDA has no time limits and is intended to bind the parties to stay silent forever. NDAs were originally invented to protect trade secrets and intellectual property during the tech boom in the 1970’s. Gradually, they have found their way into every kind of agreement (see below), including the settlement of complaints of sexual misconduct, discrimination and harassment.
An NDA is a clause inside an agreement. These clauses are sometimes referred to as confidentiality or privacy agreements. They are rarely described as “non-disclosure” in an agreement because “confidentiality” or “private” sounds less toxic – but it is the same thing.
Note that we discuss the “evil cousin” of NDAs, a non-disparagement clause, below.
RECOGNIZING AND UNDERSTANDING AN NDA
WHEN MIGHT I BE ASKED TO SIGN AN NDA?
Since our campaign began, we have found the use of NDAs in many more situations than we had first imagined.
1. Most commonly, non-disclosure agreements are used frequently at the “resolution” of a dispute, to cover up a situation that the other side does not want to be publicly known. In other words, any situation that brings shame on them personally or (if an organization/ company) affects their public reputation.
This could be the resolution of a lawsuit (a settlement agreement: read this excellent blog to understand what a settlement agreement must contain – which does not include an NDA), or it could be the resolution of a workplace complaint or a grievance
2. NDAs are also sometimes used pre-emptively - for example, at the beginning of an employment relationship, before a particular event or a meeting - before any problems or conflicts have arisen. This is to ensure that if there is a complaint or other conflict in the future, you are already bound not to speak about it.
3. NDAs are also commonly used at the outset of a workplace investigation. Historically, workplace investigations (or mediations) ask for confidentiality during the period of the investigation/ mediation – however, these are often indefinite NDAs now which prohibit talking about the investigation or what an individual said, forever.
Here is a breakdown of where we see NDAs most often:
-
If you are negotiating over leaving your job
If you make a formal complaint about (eg) discrimination, harassment, benefits, equal pay, NDAs are often required before any investigation begins (i.e. as a condition of opening an investigation or participating in a mediation). An NDA is different from simply requiring confidentiality during that process; an NDA will silence you indefinitely, even after the investigation or mediation is done.
If you are bringing a human rights claim against your employer. Provincial Human Rights Commissions use template NDAs in settlement agreements.
If you begin a new job. This may be because you will have access to commercially sensitive information (“trade secrets” e.g. a company invention or innovation that has commercial value for the company; or the new policies of a political party; or the new play strategies of a sports team; or have access to private confidential client information). Our campaign does not challenge or change this original use of NDAs. However, we are also seeing NDAs on hiring (“pre-hiring” or “pre-emptive” NDAs) which commit the new hire to making no complaints about any workplace misconduct. For example, promising not to make a complaint about sexual harassment in the future, or racism, or other discrimination or harassment. This was not the purpose of NDAs and our campaign and legislation would ban these kinds of restrictions. US federal law has already banned pre-hiring NDAs for sexual harassment
-
If you sue for product or service defects e.g. a product or service you bought, or a home you are having built. Many resolutions to these types of disputes now require an NDA so that the company does not receive bad publicity.
If you make a complaint about professional services you contracted for, for example financial advice, or travel / vacation services. In some cases, these NDAs claim to prevent access to the regulator
If you sue for accident or injury e.g. you were injured as a result of the other side’s negligence
If you make a claim for medical malpractice against a doctor or specialist
In any situation where you are claiming damages (any civil case) as a result of the other party’s behaviour.
-
If you have decided to enter into negotiation on mediation, either informally or at a tribunal, you will be asked to sign terms which require you to keep everything about your matter confidential before you begin. The practice used to be that this confidentiality would last only for the duration of the negotiations or mediation ((often called “without prejudice”, and making anything discussed in mediation inadmissible in a future trial). Today, this is usually substituted for a permanent confidentiality requirement which extends past the date of the negotiation or mediation and forever.
Similarly the practice before an investigation commences has changed, from confidentiality limited to the duration of the process, to an NDA. We have heard from many individuals who refuse to sign an NDA – rather than time-limited confidentiality – who have been unable as a result to participate in their own investigation – or the investigation simply doesn’t happen at all.
It is important to check for this detail before commencing negotiations, mediation or investigation. If it is not clear in what you are being asked to sign, ask or write in that the confidentiality undertaking shall end when the negotiations/ mediation/ investigation ends (what is said may still not be admissible in court, but you can speak about it outside that context).
HOW WILL I RECOGNISE AN NDA
An NDA clause will usually be part of a much longer agreement that you make to either settle (resolve and end) a formal complaint or a legal claim, a pre-hiring contract, or an agreement you sign to begin a negotiation/ mediation/ investigation about your situation. Sometimes it is in a separate schedule.
There is some variation in the language used in NDA clauses. Some have wider reach than others, and some have listed exceptions.
Note that an NDA is rarely described as such in an agreement. Because there is growing public awareness of the harm caused by NDAs, other “softer” words like “confidentiality” and “private” are sometimes used. But this is the same thing – it is silencing you.
The language of NDAs is often very dense and complicated, but here are some examples of the most common clauses which will help you to recognize if you are being asked to sign an NDA.
-
“The parties confirm that they agree to keep the existence and terms of this Agreement and the circumstances concerning the termination of your employment confidential….”
• This means that you agree not to speak about anything related to your experience, to anyone, forever.
• We are also increasingly seeing a briefer version ie
“The parties confirm that they agree to keep the existence and terms of this Agreement confidential….”
However, this still places you under restrictions on how much of your story you can tell. In effect, you cannot speak about the outcome where there has been a settlement. This is less onerous but in practice still severely limits what you can say.
NDAs do not state that they are “forever” but your clue is if there is no reference to a time limit or date by which it will expire (also in the case of mediation/ investigation above).
-
It is clear and undisputed in law that you cannot be prevented from reporting a possible crime to police.
• There is a legal exception for the purposes of reporting your compensation to tax authorities.
• Many NDAs add a general exception to the NDA banning speaking that says “unless required to do so by law”; for example, being called to testify in court
• Whistleblower laws mean you cannot be prevented from reporting financial proprietary and sometimes misconduct in your organization if you can bring yourself within the definition (see Thinking of Signing).
• Some NDAs write in explicit exceptions to the gag, for example,
These may include (you should check)
• your spouse or your family (but not usually your work colleagues or friends)
• a professional counselor
• a medical professional
• a lawyer whom you may consult on the agreement
• a financial advisor
• your insurer
Some NDAs allow you to speak to a counselor, an advisor or even family members only if that person also promises to keep all information relating to this settlement confidential. Some of these NDAs also make you responsible for any breaches by these individuals.
On the employer’s side, other exceptions may be written in, for example,
“those required to implement the items listed above …”
“the Employer may also disclose the existence and terms of this agreement to the Employer’s officers, employees or legal or professional advisers, provided that they agree to keep the information confidential.”
-
A NON-DISPARAGEMENT CLAUSE
This is a term that forbids you from making any negative comments that will affect the reputation of the other side, commonly known as a non-disparagement clause
For example,
“The Employee shall not make any adverse or derogatory comment about the Employer or their officers, employees or workers and the Employee shall not do anything which shall, or may, bring the Employer or their officers, employees or workers into disrepute.”
Non-disparagement clauses go much further than the legal duty not to defame another person by saying something untruthful about them. A non-disparagement clause forbids you from making any kind of negative comment (whether it is true or not) that might damage the reputation of the other side. This is a subjective measure determined by the party arguing you have broken the term, so it means that you cannot say anything critical at all, regardless of its truth. This is why we call these clauses NDA’s “evil cousins” because in some ways they are even more limiting.
These highly damaging clauses are included within the legal definition of NDA in all the Canadian legislation and most of the Acts passed now in the US.
Other terms that might be in your NDA that we have seen include:• A term that forbids you from “encouraging or cooperating with” others with a similar complaint against the same individual or organization. For example, talking to a colleague about their own complaint against the same person you complained about or participating in a future complaint or lawsuit:
“Employee further agrees not to aid, assist or encourage any person asserting claims against the Company…Employee may state only ‘I can’t talk about it’.”
• In addition you may see a term making you subject to an additional fixed penalty for every breach, and/or the recovery of any compensation you have been paid under the settlement agreement:
“A breach of this confidentiality paragraph will be deemed to be a material breach of the Agreement and will entitle Company to recover liquidated damages in the amount of $20,000 for each occurrence of breach.”
A recent example we saw included a penalty clause of $500 for each Facebook post in breach of the NDA
• A term forbidding you from posting anything about the dispute or the agreement on social media:
“Employee acknowledges that this paragraph prohibits Employee from emailing about or posting any information about Employee’s allegations on any social media networking site including…..”
• A term stating that the employer will remove any complaints or discipline or reports of investigation procedures from the personnel file of the person who you are complaining about. This means there will be no record for the future.:
“The (organization) shall remove all records of complaints or discipline issued to …. and material related thereto from (X’s) personnel file.”
Q: Aren’t NDAs supposed to protect commercially sensitive materials, intellectual property and research/ innovation which is the property of the organisation/ company / department?
A: Yes! NDAs were originally developed for this purpose in the 1980’s during the tech boom in California, to prevent former employees taking trade secrets with them when they moved to competitors. Our proposals will not change this, but instead stop the extension of NDAs to cover up misconduct, fraud and even crime.
NDAs may also be used to protect client confidentiality and personal client information.
Q: How are NDAs being used now?
A: It is estimated by many lawyers that 95% of civil settlements which use a standard "release" from a claim (the promise to discontinue a tribunal or court case or other complaint) now include an NDA.. Examples include not only settlement of sexual harassment, discrimination and other human rights abuses but also agreements to raise the price of a new house; agreements to drop medical malpractice lawsuits; settlement of lawsuits over negligent investment advice; settlement following a worker’s complaint about a pattern of neglect in a care home; settlement of insurance claims involving building construction defects; matchmaking services contracts; and even agreements binding municipal councillors to secrecy over the arrival in town of an unpopular company or developer.
Q: How would the legislation proposed by Can't Buy My Silence change this?
A: The Model Bill restricts the use of NDAs in discrimination, harassment and abuse cases in the workplace and in other settings also. It does this by setting a series of mandatory conditions which include the victim must request the NDA, they must have independent legal advice, there must be no pressure or coercion to sign and the NDA must not harm the public interest or a third party. CBMS believes that it is difficult to find an NDA in this area that would not harm the public interest in safety and healthy workplaces, or individual future victims.
CBMS would ideally like to go further with restricting NDAs in other civil contexts as well (see list above), but we see the Model Bill as an important first step. Other jurisdictions - for example the US - have already passed legislation similar to our’s, focusing on sexual harassment, sexual assault, abuse and discrimination.
Q: But aren’t NDAs essential for settling cases?
A: Since the early 1980’s, civil cases have settled before a full hearing at a rate of approximately 90-95%. Clearly this has happened in most cases until comparatively recently without NDAs.
There are many incentives to settle a case on both sides, including cost and time. For individual/ employer/ institutional defendants in harassment, discrimination and abuse cases, another disincentive is that without settlement, a court or tribunal hearing is in the public domain and will reveal the information they want to keep hidden in the NDA.
While employers and other defendants will push for an NDA to control and silence the victim, a public hearing is an even worse outcome than a settlement with no NDA - so you can push back!
CBMS has analyzed US data (from the Employment Equality Opportunity Commission) from the first nine US states (to have passed law restricting the use of NDAs in sexual harassment cases (California, Vermont, New Mexico, Arizona, Hawaii, New Jersey, New York, Washington State, and Maine). Settlement has in fact risen by 9% in these cases since NDAs were banned.
Q: But don’t victims want confidentiality?
A: Yes! But this can be simply achieved in a one-sided confidentiality clause that protects the victim. Instead, NDAs require the victim to promise confidentiality to the other side (the employer/ organisation and/or the perpetrator) in exchange for their own confidentiality.
This doesn't need to be mutual. In your negotiation, certain issues may be more important to you and others to the employer/ perpetrator. There are always “trade-offs” with different conditions on each side. So you can ask for a one-sided confidentiality guarantee that protects you and not the perpetrator/ employer. This is how the criminal justice system works, with the names of sexual offence complainants protected but not the name of the defendant.
Q: Don’t victims lever their right to speak out for more money?
A: It is important to remember that settlements for workplace harassment and discrimination are not large - and the monetary compensation paid is redress for their experience, not for staying silent. For example, a survey of 542 UK women who had signed an NDA for pregnancy and maternity discrimination conducted by Pregnant Then Screwed found that almost 20% received a settlement of less than 5K (Pregnant Then Screwed, 2022). The Center for Employment Equity analysed U.S Equal Employment Opportunity Commission and state Fair Employment Practices Agencies (2012 – 2016) and found that complainants receiving monetary compensation for being sexually harassed at work were awarded an average of $24,700 and half received less than $10,000.
The argument that including an NDA leads to multi-million settlements for victims is factually untrue, and is only ever made by lawyers with “celebrity” clients.
Far from levering the negotiations to get more money, the vast majority of the individuals CBMS hears from who have signed an NDA did not understand all its implications at the time they signed. They often do so under a great deal of pressure from the other side (and sometimes their own lawyer or union representative).
Moreover, an NDA can hide under-compensation for statutory entitlements such as severance and vacation pay. In our experience, this is the far bigger problem.
Q: Is this an equity issue?
A: Definitely. While multiple data sources now show that one in three workers has signed some form of NDA, emerging data shows a differential impact on vulnerable groups with income insecurity. Low-income individuals (eg the hospitality and accommodations sector, the retail sector) are more likely to experience sexual harassment and other forms of workplace mistreatment. CBMS data shows that Black women report having signed an NDA (75%) at three times the rate of compared to their White counterparts (28%) (Speak Out Revolution, 2022). Our data also shows four times as many women as men signing NDAs.
Q: My lawyer/ the lawyer on the other side asked me to sign an NDA to not speak to anyone about the negotiations. What should I do?
A: Say no. You are going to want to run the draft agreement past those who are closest to you before you sign any kind of restriction. At minimum, you should ask for the ability to consult with some named individuals whom you designate (see also below).
FAQ's
PART ONE : THE USE OF NDAs
Q: My lawyer says that I should sign this agreement immediately: can I ask for time to think about it?
A: You should ask for as much time as you need. Time pressure is artificial, and a common tactic. You probably want to discuss the proposed agreement with at least one other person, maybe more. If you have not yet signed an NDA to make the negotiations confidential (see above) you can speak to anyone you wish. If you have signed something to restrict what you can say about the negotiations, ask for named individuals to be designated as an exception to this.
Q: The agreement says only that the amount of compensation paid to me is confidential - is that normal?
A: This is a very common term in a settlement agreement. You may be willing to accept confidentially about the amount of compensation (or not). The legislation restricting NDAs in PEI makes a specific exception for settlement amount.
What you should be looking out for in addition are confidentiality restrictions that go further than this; for example, the structure of the settlement (how much is described as “damages”); the circumstances that led to your complaint, your personal experiences, the preceding negotiations. You should also be looking out for a non-disparagement clause (see also Recognizing and Understanding an NDA)
Q: I have a clause in my agreement that reads: “The terms and conditions of this Memorandum of Agreement shall remain strictly confidential between the parties and shall not be disclosed to anyone.” I'm not sure if this means that I still can talk about my complaint but just not the settlement?
A: This is common wording and it is intentionally unclear and vague. It is likely that the other side wants you to understand this as meaning you cannot talk about your complaint or situation at all. CBMS has seen many situations where this interpretation is assumed either by the defendants or by victims themselves.
In practice, individuals find that it is extremely hard to speak about your experience without referring to the settlement itself. The outcome is obviously part of your story of your personal experiences.
This may be something you want to ask the lawyer on the other side, or if you have your own lawyer, ask them to clarify.
CBMS treats these clauses as NDAs because they restrict talking about the experience, beyond simply the monetary amount of the settlement (see above).
Q: Does this mean I can’t even say that that we made an agreement?
A: Again, it is unclear but yes, it may mean that. Many people deal with this by simply repeating in answer to the question, “I’m not allowed to talk about that.”
Q: Is my NDA even going to be enforced by the court? Surely it is obviously unfair and I signed without fully understanding and under pressure.
A: Many if not most NDA clauses may not be enforceable by a court for these and other reasons. Recent decisions in the US have struck down NDAs as unenforceable where they were not properly consented to, or because they are simply too vague and unreasonable.
Breach of the NDA (or any other term, including a non-disparagement clause) means breach of the contract and in theory gives the employer the right to seek the return of your compensation. This is what happened in the last Canadian case (2013) involving the journalist Jan Wong.
More recently, there is caselaw that says that a contract that exploits a power difference between the parties may be unenforceable (Uber v Heller).
However, there are at this point only a small number of legal decisions which have tested the enforceability of non-disclosure agreements and the answers to these questions are still uncertain. This is why we need new law to ban cover-up NDAs from the beginning!