An NDA, or non-disclosure agreement, is a contract in which parties agree not to disclose information covered by the agreement. These are often not enshrined in a written contract, such as attorney-client privilege, or doctor-patient confidentiality, but more formal NDAs are commonly used in commercial settings and business relationships to bind two parties to silence on issues ranging from confidential documents to accusations of wrongdoing and resulting settlements. Very few argue that NDAs being used to protect competition or trade secrets is something to be stopped, but controversy arises when victims of wrongdoing and the wrongdoers themselves enter an agreement to prevent the wrongdoing from being exposed.
The opinions of this article are solely those of the author and are not intended to provide accurate legal advice for anyone to rely on. While the content is intended to be factually correct, the author does not accept any responsibility or liability arising from the use or misuse of this article or any loss/inconvenience/damage stemming from this. Legal advice should be sought from a qualified professional, not this blog. The opinions represented in this blog are personal and belong solely to the blog owner, and do not represent those of the people, institutions, or organisations that the owner may or may not be associated with in a professional or personal capacity, unless explicitly stated. The views expressed by any podcast guest are their own entirely, and do not necessarily reflect those of the blog owner. The blog owner is not responsible and liable for any discrepancy, if any. Any content provided by this blog or its companion podcast is not intended to malign any religion, ethnic group, club, organisation, company, individual, or anyone or anything.
Employees are often made to sign NDAs after their dismissal following unacceptable practices, discrimination, or harassment, and may be paid compensation in return. While NDAs cannot be enforced in the UK and other countries if the contracted activities are criminal, they may still have the effect of intimidating former employees into silence. But popular culture has raised the profile of whistleblowers from anonymous employees to Academy Award-winning characters and storylines, from Julia Roberts in Erin Brockovich to Meryl Streep in Silkwood, and what is, at its most basic, an intersection between contractual law, criminal codes, and morality has become a focus of veneration and glorification. This post shall examine the benefits of both NDAs and whistleblowing, and the impact of NDAs on freedom of speech.
The benefit of NDAs
Like most things, NDAs arose to fulfil a purpose, in this case, the protection of privacy. Whilst it may seem counterintuitive, it may actually be in the best interest of the whistleblower to remain silent in some cases, particularly in the case of sexual assault. Gloria Allred, a women's rights attorney in the US was criticised in the wake of the #MeToo movement for assisting clients to settle their legal claims against sexual predators by entering into NDAs. Her detractors argued that by remaining silent, the wrongdoing would be allowed to continue, and by trading silence for monetary compensation, it reduces the pain of the victim to a figure on a cheque. Allred, however, argues that assault victims have every right to keep their trauma and settlements private, and the legal scholar Scott Altman affirms this in his article 'Selling Silence: The Morality of Sexual Harassment NDAs' when he states that victims are morally entitled to remain silent. Though it may seem selfish or counterproductive to the safety of other potential victims, by removing the right to silence, the law places a heavy burden on the victim to recount and relive their trauma in potentially costly and lengthy litigation, which may end in a less desirable outcome than an NDA settlement would have. Allred also points out in an article she wrote for the LA Times that NDAs do not cover testimony in a criminal trial, or in depositions or trials in civil cases if the victim was subpoenaed to provide such testimony. Therefore, there is a reduced risk of further wrongdoing without placing an undue burden on the victim, who can still benefit from an NDA and justice for the wrongdoer.
Other theorists, including Levmore and Fagan, believe that a contractual NDA may have the same outcome as a civil case against the wrongdoer, in that the victim is both compensated financially, and the wrongdoer is deterred from committing the same acts in the future as a result of larger settlements. But an NDA, or any contract, is a fundamentally bilateral arrangement, affording privacy to both the victim and the wrongdoer. While in some cases this may seem unfair, such as in the case of NDAs protecting Harvey Weinstein, in other cases, the wrongdoer is similarly deserving of privacy, particularly in cases where NDAs may protect wrongdoers from disproportionate social punishments, such as loss of earnings or future careers. Some lawyers and academics believe there is a 'right to identity', where one person has the right to not allow one event to define them, and NDAs afford some protection for this 'right to identity' that would otherwise be harmed by excessive condemnation that doesn't fit the crime.
The benefit of whistleblowers
Scott Altman's article provides a useful analysis of how NDAs harm both the victims themselves, and the wider culture around sexual harassment. He argues that NDAs help repeat perpetrators avoid detection, and deprive victims of the opportunity to find out information that could help them to win a lawsuit - after all, there is no discovery process before signing NDAs. Some theorists even push for a 'disclosure duty', to mandate victims of sexual harassment and other wrongdoing to inform either their workplaces or an independent body of their experiences. Such a disclosure duty, they argue, would increase disclosure frequency, thereby reducing the stigma that is associated with disclosing sexual harassment. Disclosure duties would also prevent those who do speak out from being perceived as problematic employees, or 'troublemakers', as they would have had no choice.
More critical commentators argue that not speaking out, not blowing the whistle, actually makes the victim complicit in the wrongdoing. Satz, in his article 'Why Some Things Should Not Be For Sale: The Moral Limits of Markets' has criticised NDAs as undermining antidiscrimination efforts, by preventing women from speaking up, and relegating them to remaining victims instead of the whistleblowers the public idolise, including unlikely heroes such as Stormy Daniels. Though there is ordinarily no legal duty to speak out for victims in tort or crime, NDAs may entrench the belief that women should feel shame about being victims, and normalise secrecy about victimisation.
Lawmakers too have become increasingly concerned about the issue of NDAs, with many US states taking action to protect victim anonymity (such as the California Code of Civil Procedure s.1001) while still protecting the public interest in requiring disclosure, or limiting the scope and enforceability of NDAs (such as the Florida Sunshine in Litigation Act). The 1998 Public Interest Disclosure Act in the UK is the primary legislation dealing with whistleblowing, and aims to protect whistleblowers from detrimental treatment by their employer, while protecting their right to blow the whistle in the first place. It seems that legislators are fairly uniform in their belief in the public benefit of whistleblowing.
The impact of NDAs on freedom of speech
A report commissioned by the UK government in April 2019 entitled 'Confidentiality Clauses:Consultation on Measures to Prevent Misuse in Situations of Workplace Harassment or Discrimination' wrote that "the government shares the concern that confidentiality clauses which claim to limit a worker's disclosure rights are being used to intimidate or silence victims of harassment or discrimination." While the report does not explicitly refer to 'freedom of speech', it is clear in its concern that current laws prevent or deter whistleblowing that may be for the public benefit.
David Lewis has been forthright in his criticisms of the Public Interest Disclosure Act 1998, particularly the fact that it does not force employers to make a policy regarding to disclosure, and does not prevent employers from 'blacklisting' and refusing to hire those who have blown the whistle in the past. Tellingly, a Public Concern At Work survey found that only 38% of respondents worked for companies with whistleblowing policies in place, forcing those who do wish to blow the whistle to resort to riskier and more controversial means of doing so. Gobert and Punch have similarly criticised the Act for excluding volunteers and self-employed individuals, as well as lacking provisions for psychological harm caused by whistleblowing. These provisions not only deter whistleblowing, but effectively render those who do wish to blow the whistle unable to do so in a safe and responsible manner, restricting their freedom of speech.
Altman also notes the potential issues regarding future whistleblowing, as NDAs bind victims of wrongdoing indefinitely, and so if individuals decide later that they do want to blow the whistle, they are unable to do so. Whilst freedom of contract would dictate that an individual is perfectly within their rights to waive their right to future disclosure, Altman raises the issue of inequality of bargaining power, and how under-compensation of victims could potentially vitiate the contract, and release the victim and the wrongdoer from their NDA.
The importance of freedom of speech is emphasised in Jeffrey Steven Gordon's article 'Silence for Sale', who quotes Raz's belief in the "great importance of free expression." Gordon views freedom of speech as a 'special right', singled out by the 1st Amendment to the US Constitution, and he argues that the use of NDAs deprives the community of the information to form independent judgments. He cites the example of Stormy Daniels and Donald Trump's NDA, arguing that the public have a right to know about the President's potentially illegal activities, and this particular NDA, which included a punitive clause requiring Daniels to pay $1 million for each unauthorised disclosure of confidential information, violated Daniels' right to freedom of speech. The fact that Daniels' compensation for signing the NDA was only $130,000, the inequality of bargaining power raised by Altman further consolidates the opinion that, at least in this particular NDA, the contract was not to the benefit of the victim, or the public at large, but instead the wrongdoer.
Gordon has pointed to US jurisprudence as being wary of public policy exceptions to NDA enforceability, because public policy still strongly favours freedom of contract, as a remnant of the Lochner era. As such, freedom of speech, at least in the US, can be consistently said to restrict freedom of expression in favour of freedom of contract, which inevitably has the effect of reinforcing the status quo of a patriarchal society, at least in the context of sexual harassment NDAs, but also allows, through under-compensation and inequality of bargaining power, wrongdoers to consistently get away with their actions without fear of consequence.
Conclusion
When individuals have signed NDAs, they have signed away their right to tell people of the wrongdoing they have suffered, for better or worse. While some victims may feel more comfortable remaining silent on the issue, and not having to relive their trauma through further litigation, there remains the fact that silence is an option regardless of whether one has signed an NDA or not. The risk of inequality of bargaining power is present whenever the victim is an employee and the wrongdoer an employer, and NDAs simply reinforce this inequality by buying the silence of that employee and maintaining the culture of secrecy and victimisation that restrict freedom of speech in a very similar way to NDAs. As Gordon concludes: "NDAs do not exercise free speech rights; they waive those rights," and so in a society that values whistleblowers so highly, the question remains why our laws continue to prioritise silence and secrecy.
Comments
Post a Comment