The non-disclosure agreement was a sensible legal instrument for a real problem. Companies have legitimate interests in protecting trade secrets, customer lists, and proprietary processes, and contracts that obligate employees and partners to confidentiality serve that interest. None of that is in dispute. What has happened over the last few decades is that NDAs migrated from protecting information into suppressing experiences, and the legal system has been slow to draw the distinction.
The MeToo era surfaced how thoroughly the migration had succeeded. Cases involving serial predators consistently revealed long trails of NDAs that paid victims to be silent and let the misconduct continue.
How NDAs got repurposed
The core legal mechanic is unchanged. An NDA is a contractual promise not to disclose specified information in exchange for consideration, typically money. The drift came from what counted as “specified information.” Settlements for harassment, discrimination, and assault increasingly began including blanket non-disclosure clauses that covered not only the settlement terms but the underlying allegations themselves.
Employers found the clause useful for reasons that have little to do with information protection. A signed NDA isolates each victim from learning about other victims, prevents pattern-of-conduct evidence from accumulating, and discourages new victims from coming forward by removing the social proof of prior accusations. The legal architecture is the same as a trade-secret NDA. The function is fundamentally different.
The reform that has and hasn’t happened
The Speak Out Act of 2022 and the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 carved out specific federal protections for victims of sexual harassment and assault, allowing them to discuss their experiences regardless of pre-existing NDAs and prohibiting forced arbitration of those claims. Several states have gone further, with California, New York, and Illinois passing laws limiting NDA scope in harassment contexts.
What hasn’t happened is reform of the broader category. NDAs that suppress racial discrimination claims, wage theft allegations, and most other workplace misconduct remain enforceable in most jurisdictions. Industries with mandatory arbitration outside the carved-out categories continue to use confidential settlements as the standard tool for keeping pattern misconduct out of public view.
The asymmetry that drives use
The reason NDAs are routinely signed even when they shouldn’t be is the asymmetry between parties at the moment of settlement. The accuser typically has legal bills, a damaged career, and a pressing financial need. The accused organization has lawyers on retainer and time. The settlement on offer almost always includes the NDA as a non-negotiable term, with the implicit message that refusing means walking away with nothing.
Most accusers, advised that litigation is uncertain and slow, sign. The structural pressure means even a legal regime that nominally allows NDAs to be refused produces a steady stream of signed ones, because refusal is functionally available only to wealthy plaintiffs.
The bottom line
The NDA hasn’t changed. The use case has, and the law has lagged. Reforms targeting sexual harassment specifically were correct and overdue. They also leave most of the misuse intact. A serious update would limit confidentiality clauses to actual proprietary information, full stop, and let everything else see daylight.
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