Talking to a lawyer about private company matters is never a breach of your NDA. What you say to a lawyer, from your first words, is protected by the client-attorney privilege.”
“It is not always safe to communicate government misconduct to your lawyer. It is especially risky to reveal any information that is classified as intelligence information by the government to a lawyer, unless they have an appropriate government clearance. If you do approach a lawyer about concerns related to government business, it is important to pin down in advance what can and can’t be lawfully disclosed, both to the lawyer and to third party audiences. Experienced organizations like GAP are good at deciphering these issues and are open to speaking about concerns relating to government business.” Tom Devine, Legal Director of the Government Accountability Project
“In cases where I represent employees, typically tech companies aren’t suing employees for breach of NDAs. Rather, the employees are usually bringing claims against their employers.” Peter Rukin at Rukin Hyland Riggin LLP
Business Insider’s review of 36 NDAs
“To understand how non-disclosure agreements have come to form the backbone of Silicon Valley’s culture of secrecy, Insider reviewed 36 agreements shared by tech workers at companies ranging from Fortune 500 giants like Facebook, Google and Apple, to smaller startups . . . The documents show how restrictive forced silence has become, both in employment agreements reached when an employee starts a job and in separation agreements . . . Findings include:
- Non-disclosure agreements meant to protect confidential trade secrets are often so broad they cover information an employee learns outside work, such as personnel matters and information not necessarily marked as “confidential” internally.
- Some NDAs say explicitly that the confidentiality provisions never sunset, effectively making them lifelong agreements.
- All the separation agreements reviewed by Insider also include non-disparagement clauses, many of which are so broad that employment lawyers say they could limit the employee from saying virtually anything about the company.
- More than two-thirds of workers who shared their agreements with Insider said they weren’t exactly sure what the documents prevented them from saying — or whether even sharing them was a violation of the agreement itself.”
– Matt Drange, Insider (July 27, 2021)
What is not enforceable in a NDA?
NDA is a very broad term. Some clauses are legitimate and enforceable, like the ones related to the disclosure of proprietary business information. Others, like the ones more broadly related to your experience at work, may be less enforceable.”
“Fraud is not a trade secret.” Tyler Shultz, Theranos whistleblower
Put plainly, NDAs are not binding when it comes to information that is related to a crime or information that is manifestly in the public interest.
Any language in a NDA that prevents you from going to the government with information on a violation of federal law or regulation is not enforceable. While this is subject to interpretation, a lawyer can help you assess the NDA language and the nature of the violation.
“The SEC has fined 10 companies for including in their various types of employment agreements language that seeks to undermine a whistleblower’s ability to communicate with the SEC about wrongdoing, thereby silencing or chilling whistleblowers’ speech. The SEC is incredibly proactive in protecting its whistleblowers.” Mary Inman, Partner at Constantine Cannon LLP
“The law prevents any employer from requiring employees to waive their rights to file whistleblower claims under the SEA and CEA qui tam laws. The SEC, by regulation, ensured that employers could not interfere with employee communications to the Commission: ‘No person may take any action to impede an individual from communicating directly with the Commission staff about a possible violation, including enforcing, or threatening to enforce, a confidentiality agreement . . .’ The Commodity Exchange Act has a similar rule, as does the amended version of the Sarbanes-Oxley Act. The commission has put teeth into these provisions and has sanctioned companies that required employees to sign restrictive non-disclosure agreements, including imposing monetary fines and penalties.” Stephen Martin Kohn, The New Whistleblowing: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself (2017), p. 122
“‘Many of the agreements you see aren’t actually enforceable, but they never make it into court. Companies are able to enforce them through private means,’ said Jodi Short, a professor at UC Hastings law school in San Francisco who has studied NDAs. Short said the threat of going to court is enough to silence most employees. And, of the few who pursue legal action, she said, many are able to bring claims only through mandatory arbitration, a process also shrouded in secrecy.” Matt Drange, Insider (July 27, 2021)
“The threat is enough. It’s not the threat of actually losing in court that keeps people silent. It’s the threat of needing to hire a lawyer. Of maybe getting fired from your current job, not because of the legal dispute, exactly, but because you can’t show up for work because you are being deposed. Because you have to take off time that you don’t have when you need a babysitter to watch your kids . . . There’s so much more to lose than an actual court battle, and the companies understand that fully. Which is why they keep on using these agreements, even though portions of the agreements, as you wrote in your piece, they already know aren’t legal.” Ifeoma Ozoma, quoted in Insider (August 1, 2021)
“In a poll of users conducted [in 2020] by Blind, a popular anonymous message board, and published by the tech site Protocol, nearly 40% of tech workers who reported signing NDAs at their company felt the agreement prevented them from discussing ‘injustices in the workplace.’ But that’s not true in many states. In California, workplace misconduct is reported to the Department of Fair Employment and Housing. To ensure that whistleblowers aren’t improperly intimidated, the DFEH asks employees reporting incidents to the agency whether they were made to sign an NDA by their employer. If the DFEH reviews an NDA and finds it goes too far, agency staff will contact the employer.” Matt Drange, Insider (July 27, 2021)
Tips
If you aren’t getting any compensation or benefits when you exit, don’t sign an NDA. If they are offering compensation or benefits, it’s up to you to decide if it’s worth it to sign.”
“When negotiating your end-of-contract NDA, you can ask them to include names of people who aren’t allowed to speak poorly about you. This provides protection against disparaging you, while still allowing you to speak to regulators about the company’s wrongdoing, which is always a protected right even if you have an NDA.” Steve Kohn, Whistleblowing Lawyer and Founding Partner of Kohn, Kohn and Colapinto
NDAs Glossary
“Today, NDAs come in two flavors: non-disclosure and non-disparagement. A non-disclosure typically limits what someone can say about their work and to whom, while a non-disparagement restricts workers from describing their employer or business partners in a negative light — a tricky tightrope that’s hard to define.” Matt Drange, Insider (July 27, 2021)
Defamation
Companies can also sue for defamation.
“Defamation can be written (libel) or spoken (slander) . . . A public figure must establish that a [whistleblower’s] false statement was made knowingly or with a reckless disregard for the truth. This requires proving the subjective state of mind. A defamation case by an individual who is not a public figure need only show that the whistleblower was at fault — usually negligent in making a false statement.” Tom Devine & Tarek F. Maassarani, The Corporate Whistleblower’s Survival Guide: A Handbook for Committing the Truth (2011), p. 100
Non-disparagement clause
Even if you can prove what you’re saying is not defamation, because it is true, your employer can still sue you for breach of contract if there is a non-disparagement clause in an agreement you signed. Non-disparagement clauses generally say that you cannot speak ill of the company (whether true or not). Just because they sue you doesn’t necessarily mean they will win the case. However, it could be costly for you to defend the suit, which is the goal. You can talk with your lawyer about your options and what the local laws say about strategic lawsuits against public participation (SLAPP) suits, which are just meant to intimidate you.
Pre-action letter
You might get a long pre-action letter where the company says they will take you to court if you don’t do “X.” It is usually really long and really scary, which is the goal. You can give it to your lawyer, who will pick it apart and reply.
Injunction
A company may go to a judge and ask them to issue an injunction. This can happen if you report internally or the company becomes suspicious you may speak out about wrongdoing. Violating an injunction can result in a finding that you are in “contempt of court,” which comes with civil and sometimes criminal consequences. This is something to keep in mind when deciding whether to report internally about wrongdoing. The company may make your life difficult and intimidate you during the injunction period to prevent you from speaking out after the injunction is lifted, so you want to avoid an injunction. It is easier to get an injunction in Europe than the US. They can try to get injunctions in EU courts vs. US courts if the issue affects European citizens as well. Unless you are ready with lawyers to fight the request for an injunction by showing that your information is in the public interest, it can be hard to avoid. Judges may say they are not permanently preventing you from speaking and it is just a delay. Companies will say they are working to correct the wrongdoing you revealed and they need time.
