NDA INFORMATION

 

 

HAVE YOU SIGNED AN NDA?THINKING OF SIGNING AN NDA?RECOGNIZING an NDA

myth and realityinfographicsBLOGS, PODS & videos

 

Please note that none of this constitutes legal advice specific to your case but information for public education.

Image


HAve you signed an NDA?

 

If you have already signed and NDA and regret it, then please consider the following, a large proportion of NDAs are unenforceable and are documents that rely on the threat and fear of retaliation. The reality is the guilty party are unlikely to want to cause publicity by suing you if you contest it. We cannot guarantee this so here are some actions you could take:

Share your story

Write your own story (without any personal identifying information) for our “testimonies” page.

Inform your member of parliament

Assert your support for the ban of NDAs. Tell your government representative about the stifling abuse and prevalence of NDAs.

Involve your lawyer

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.

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.

Ask for a release

Consider asking the other side to release you from your NDA. We have provided a template letter to help you to do this.

 

RELEASE REQUEST LETTER

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.

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.

Protect your identity

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.

NEGOTIATE

Negotiate for fewer restrictions in the NDA - for example, communication with family, friends and health professionals or therapists


Think and consult

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.

It is your right to decline

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.


RECOGNIZING AND UNDERSTANDING AN NDA

A non-disclosure agreement or an NDA is a signed legal 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 besides (see below).

 

An NDA has no time limits and is intended to bind the parties to stay silent for ever.

 

These agreements are sometimes referred to as confidentiality or compromise agreements.

When might I be asked to sign an NDA?

 

Non-disclosure agreements are often used to cover up any situation that the other side does not want to be known. In other words, any situation that brings shame on them personally or affects their public reputation if the other side is a company or institution.

 

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 is there is a complaint or other conflict, you are already bound not to speak about it. 

 

NDAs are legitimate for the protection of intellectual property or trade secrets but make sure this is all they cover.

 

Here is a breakdown of where we see NDAs most often.

IN the workplace

  • 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 doing mediation). An NDA is different from simply requiring confidentiality during that process; an NDA will silence you indefinitely, after the investigation or mediation is done (see also (iii) below).
     
  • If you are bringing a human rights claim against your employer
     
  • If you are a whistleblower calling out another employee’s bad behaviour and its impact
     
  • If you begin a new job in which you have access to commercially sensitive information (“trade secrets” e.g. a company invention or innovation that has a value for the company in the market it operates in). You may be asked to promise not to pass that commercial information to another business comptetitor. This was the original purpose of NDAs, and our campaign to change the law does not affect this use of an NDA.

In disputes outside the workplace

  • If you sue for product or service defects e.g. a product or service you bought, a home you are having built
     
  • If you sue for accident or injury e.g. you were injured as a result of the other side’s negligence
     
  • In any situation where you are claiming damages (any civil case) as a result of the other party’s behaviour

Before you begin to negotiate or mediate, or before an investigation

  • If you have decided to enter into negotiation on mediation, either informally or at a tribunal, you may be asked to sign something telling you to keep everything about your matter confidential before you begin. Usually, any discussion about settlement is “without prejudice”, meaning that those discussions will be confidential 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 not just during the negotiations.
     
  • We have also seen organizations requiring parties who make complaints to sign non-disclosure agreements before they will agree to investigate. Again, this is different from asking complainants not to talk about the process while an investigation is ongoing and before a resolution because an NDA is an agreement to keep the underlying nature of the complaint confidential for all time not just during the investigation.

 

HOW WILL I RECOGNISE AN NDA

 

An NDA clause will be part of a much longer agreement that you make to either settle (resolve and end) a formal complaint or a legal claim, or an agreement you sign to begin a negotiation/ mediation/ investigation about your situation.

 

There are many different types of NDA clauses and some have wider reach than others. The language 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.

A typical 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, for ever.

 

Current law makes it clear that you cannot be prevented from reporting a possible crime to police. However, the subject of your complaint may not be a crime (most sexual harassment is a civil matter and not a crime for example) and or you may not feel comfortable or hopeful about reporting what has happened to you to police.

 

The current law also carves out an exception for the purposes of reporting your compensation to tax authorities. As well, whistleblower laws mean you cannot be prevented from reporting misconduct in your organization.

 

Many NDAs deal with this by adding a general exception to the NDA that says “if required to do so by law”, for example if a whistleblower makes a “protected disclosure” about workplace misconduct.

Exceptions to the NDA

Some NDAs write in other exceptions to the gag, for example,

 

“The terms and conditions of this Memorandum of Agreement shall remain strictly confidential between the parties and shall not be disclosed to anyone other than ….”

 

There will then follow a list of people to whom you CAN disclose. These may (you should check) include

 

  • your spouse or your family (but not usually your work colleagues or friends)
  • a professional counsellor
  • 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 counsellor, 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.”

Other common nda terms to watch out foR

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 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’.”

 

  • A term making you subject to a 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 term forbidding you from posting anything about the dispute or the agreement on social media

 

“Employee acknowledges that this paragraph prohibits Employee from e-mailing about or posting any information about Employee’s allegations on any social media networking site including…..”

 

Some clauses go further and give control over the public narrative to the Employer, for example,

 

  • 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 behaving 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 his personnel file.”

 

  • A term that forbids you from making any negative comments of any kind about your former employer or the other side. This is 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-disparagements 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 (true or not) that might damage the reputation of the other side

 

  • An NDA that is part of an agreement (“terms of mediation”) before beginning a negotiation or a mediation either privately or at a tribunal or court. In the past “terms of mediation” stated that these discussions and anything offered by the other side in those discussions could not be admitted into evidence at a future court hearing. The purpose was to encourage offers to be made while the mediation was going on without that party worrying that it might be repeated at a future trial. 
  • It is now common practice for terms of mediation to include an NDA. This means that nothing that either side says, or introduces as documents, in that discussion can ever be talked about in the future, not only at a trial but also outside or even after a trial. For example, from one Tribunal’s “User Guide”:

 

“All messages, settlement offers, and documents that are shared in Stage 1 – Negotiation or Stage 2 – Mediation of a … case are private and confidential. That means that Users cannot: • Describe them in detail to others… • Openly discuss them at a meeting … (with others) • Publicly post or distribute them … • Otherwise disclose them to individuals who are not part of the … case … (These) confidentiality requirements do not expire after the case closes. Users must maintain confidentiality during a case and after it has concluded.”

 

FAQ's

 

Part One : The use of NDAs

 

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.

 

Q: How are NDAs being used now?

 

A: It is estimated that 95% of civil settlements now include an NDA as part of the standard "release" from a claim (the promise to discontinue a tribunal or court case or other complaint). 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; agreement 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 (and already passed in PEI) 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 have already made similar moves, 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 a court or tribunal hearing is in the public domain and so could negatively affect their reputation.

 

(This means that while 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 wants to remove the option of an NDA in these negotiations, because we see them being used to coerce and intimidate complainants. We also strongly believe that covering up misconduct is bad for organizations and bad for society. Finally, a defendant already has legal protection (in the law of defamation) against anything untrue or unfounded said by a victim. In contrast, NDAs are about covering up the TRUTH.

 

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. Instead you can ask for a one-sided confidentiality guarantee that protects you and not the perpetrator/ employer.  

 

Q: Don’t victims lever their right to speak out for more money?

 

A: The vast majority of the individuals CBMS hears from who have signed an NDA did not understand it at the time they signed, and did so under a great deal of pressure from the other side (and sometimes their own lawyer). It is important to remember that settlements for workplace harassment and discrimination are not large - and the monetary compensation they do receive 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 sexual 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. 

 

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 that 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).  

 

PART TWO : YOUR AGREEMENT

 

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. You may also want to discuss it with someone whom you are not allowed to speak to about it and if that is the case, you should say so and ask for them to be designated as an exception to the confidentiality agreement.

 

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). What you should be looking out for in addition is confidentiality restrictions that go further than this.

 

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 is 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.

 

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. 

 

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 have struck down NDAs as unenforceable where they were not properly consented to, or where they exploited a power difference between the parties, or because they are simply too vague and unreasonable (see our case law section, coming soon).

 

However, there are at this point only a small number of legal decisions which have tested the enforceablility 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! 

If you have other questions that are not answered here, please email them to info @CBMS.com and we shall do our very best to respond.

 

Please note that none of this constitutes legal advice specific to your case but information for public education.


Myth and reality

Myth

reality

NDAs protect victims after a traumatizing event   

NDAs often retraumatize victims by isolating them from potential supports and preventing them from discussing what happened

MYTH: NDAs protect victims after a traumatizing event   

REALITY: NDAs often retraumatize victims by isolating them from potential supports and preventing them from discussing what happened

NDAs are necessary to protect victims’ confidential information   

It’s easy to draft confidentiality clauses that protect victims’ information while still allowing them to speak out if they choose

MYTH: NDAs are necessary to protect victims’ confidential information   

REALITY: It’s easy to draft confidentiality clauses that protect victims’ information while still allowing them to speak out if they choose

NDAs restricting a victim’s ability to speak to ANYONE about what happened for an unlimited time are “standard” 
 

NDAs, like any other clause, are negotiable. You can reject one entirely, extend the parameters of who the victim can tell their story to, or limit how long the NDA applies

MYTH: NDAs restricting a victim’s ability to speak to ANYONE about what happened for an unlimited time are “standard”

REALITY: NDAs, like any other clause, are negotiable. You can reject one entirely, extend the parameters of who the victim can tell their story to, or limit how long the NDA applies

Employers won’t settle disputes if NDAs aren’t an option    

When victims push back against NDAs, employers frequently agree to settle disputes without restricting a victim’s right to tell their story

MYTH: Employers won’t settle disputes if NDAs aren’t an option    

REALITY: When victims push back against NDAs, employers frequently agree to settle disputes without restricting a victim’s right to tell their story

It’s important for employers to be able to protect their reputations with NDAs      

NDAs should never be used to protect an employer’s reputation if they allow employers to “pass the trash” and put other people at risk

MYTH: It’s important for employers to be able to protect their reputations with NDAs      

REALITY: NDAs should never be used to protect an employer’s reputation if they allow employers to “pass the trash” and put other people at risk

NDAs are reasonable and not overly restrictive       

NDAs are often too broad, and can prevent victims from speaking to friends, family, and even therapists about what happened

MYTH: NDAs are reasonable and not overly restrictive       

REALITY: NDAs are often too broad, and can prevent victims from speaking to friends, family, and even therapists about what happened