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How employers use NDAs to scare whistleblowers

The world of business is filled with secrets. Companies go to great lengths to protect their intellectual property, trade secrets and specific processes, so they can maintain the edge they need to succeed. 

Some of those great lengths include non-disclosure agreements (NDAs). NDAs can cover a wide range of issues, from customer finances to inventions, but their primary purpose is to protect a company's interests. However, there are many cases of New York employers misusing NDAs against their employees. 

How NDAs are supposed to work

The essential aspects of NDAs usually include:

  • The explanation of what information is confidential, such as an invention
  • The liability of the employee who hears this information
  • The period they must keep the information confidential
  • Specific legal safeguards or stipulations to protect the information

The U.S. Securities and Exchange Commission provides a general example of the language NDAs commonly include regarding these factors.

Unfair employers may concentrate on an employee's liability once they sign the NDA. For example, if a whistleblower filed a report with confidential evidence, employers might attempt to take legal action against a whistleblowing employee and claim their actions were a breach of contract. They often make the threat of legal action clear in the language of the NDA.

Trying to intimidate employees into silence

Employers may use the language of NDAs to protect more than their trade secrets, but also hold an employee's position over their head. It is true that most NDAs bind employees to maintain confidentiality. And they could lose their job if they do not.

However, employers might also try to bend the language of the NDA to their advantage. They might add vague language and broad clauses that threaten legal action or job loss if employees divulge any information about the business at all.

Regardless, this language does not apply to whether employees can disclose abuse, fraud or labor violations in the workplace.

Can NDAs prevent whistleblowing?

NDAs cannot stop employees from blowing the whistle. Any form of good faith whistleblowing is a protected act. While it may be helpful to have an experienced attorney review the agreement before disclosing any information, all employees reserve the right to report labor and legal violations in the workplace.

The 2012 Whistleblower Protection Enhancement Act (WPEA) specifically addresses NDAs. It added provisions to whistleblower protections that prevent any NDA from jeopardizing an employee's rights.

The language used in employee NDAs may be ominous, but it is against the law for employers to hinder an employee's rights and whistleblowing protections.

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