Understand NDAs in Workplace Contracts and Settlements

A Non-Disclosure Agreement is a legal contract that prohibits one party from revealing certain information. In a workplace context, this determines what you can and cannot discuss publicly, with friends and family, and with future employers. NDAs are often used to –

• Protect Confidential Information: Safeguard company proprietary information
• Limit Disclosure: Restrict employees from discussing their employment terms, workplace practices, or details of settlement agreements

While NDAs are often viewed as tools primarily benefiting employers, they can also offer several advantages for employees. Here are some benefits you might gain from signing an NDA.

1. Securing Settlement Terms with Guaranteed Benefits
   • Financial Compensation: NDAs often include monetary payments in return for keeping certain information confidential.
   • Example: Signing an NDA as part of a severance package might entitle you to a payout and provide some financial stability while looking for a new job.
2. Manage Your Professional Reputation
   • Positive Reference: Your employer may provide a positive reference 
   • Control the Narrative: Help you maintain privacy over sensitive or potentially damaging information, allowing you to protect your professional image and prevent disputes from affecting future opportunities
   • Example: An NDA might protect against the disclosure of a sensitive workplace dispute, allowing you to present a positive professional history to future employers
   • Consider: Get a written letter of recommendation by your employer
3. Achieve Closure and Confidential Resolution
   • Get Closure: Resolve disputes clearly so you can move forward
   • Example: Settling a workplace dispute with an NDA can provide a sense of closure so you can move on
4. Provide Clear Expectations and Protection
   • Clear Expectations: NDAs can clarify what is expected of both parties
   • Mutual Protections: When negotiated effectively, NDAs can include mutual non-disparagement clauses that protect both you and the employer from negative statements
   • Example: An NDA might specify the exact scope of confidential information, and can limit what your employer says about you
5. Can Be Leveraged in Negotiations for Improved Settlement Terms
   • Negotiation Power: Agreeing to confidentiality might provide leverage to negotiate better settlement terms, including a greater financial payout, and greater benefits 
   • Customized Agreements: Employees can negotiate for customized NDA terms that meet their specific needs
   • Example: In exchange for signing an NDA, you might negotiate for a higher severance payout or additional career transition support

Before signing an NDA, or an agreement with an NDA attached to it, evaluate it based on the following areas. 

1. Too Broad in Scope
   • Vague Terms: Be aware of NDAs with vague or overly broad definitions of confidential information
   • Indefinite Duration: Some NDAs impose confidentiality obligations that last indefinitely, which can be overly restrictive
2. Unintended Consequences
   • Impact on Legal Rights: Signing an NDA without fully understanding its implications could limit your ability to file a lawsuit
   • Barriers to Support: NDAs might prevent you from discussing your case with legal advisors or support networks

While NDAs may be acceptable for safeguarding business information, they can also be used to silence employees about toxic work environments, allowing misconduct to go unchecked. Such agreements have historically protected offenders, enabling ongoing abuse without accountability. However, since 2022, victims of sexual harassment and abuse have fewer restrictions due to the Speak Out Act.

Recognize the risks before committing to an NDA.

1. Future Employment Limitations
   • Restricted Job Discussions: NDAs might restrict what you can say about your previous job, which could affect your job search and career growth
   • Reputation Management: NDAs may stop you from talking about negative experiences, which might influence how you’re viewed in your industry
2. Legal and Financial Consequences
   • Breaching Terms: Violating the NDA can result in legal action or fines. It’s important to fully understand and follow the terms after signing
   • Consider: Review the penalties section for breaching the NDA to understand the consequences of breaking its terms, whether intentionally or not