Non-disclosure agreements (NDAs) are frequently required of employees in a variety of businesses in order for them to perform their jobs. An employee of a pharmaceutical company, for instance, might be required to promise not to divulge trade secrets to rival businesses. Client-facing employees may be required to sign NDAs promising not to divulge client-related issues in specific contexts. Only specific NDA types are upheld in court, despite the fact that most NDAs are designed to safeguard employer assets and property.
The act of reporting an employer for risky or unlawful behavior is known as whistleblowing. An employee at a food processing factory, for instance, may report blatant violations of Food and Drug Administration (FDA) or Department of Agriculture (DOA) rules to these organizations in good faith without fear of losing his or her job or encountering other types of reprisal. The Whistleblower Enhanced Protection Act, which was passed by Congress in unanimity in 2012, made it possible for even government employees to disclose fraud and criminal activity.
NDAs’ enforceability
Even while most courts wouldn’t enforce an NDA in most situations, many businesses and other parties insist on signing one. What works best for many businesses, employers, and other parties seeking NDAs is the psychology underlying them. Even if the NDA is void, it can nevertheless be effective in keeping a signer from speaking out. Even though an NDA is not enforceable, it nevertheless functions if it forbids the signer from publicly criticizing a particular matter.
In the end, the party requesting an NDA is effectively betting that the party signing it won’t take legal action to revoke the NDA. They typically intend for the signer to simply accept that the NDA precludes reporting a problem, while subtly threatening the signer with legal action if the signer violates the NDA.
Anyone who signs an NDA should be aware of all the various provisions, exclusions, and restrictions it contains. Some NDA provisions might be enforceable, while others might not. Legal issues may also arise from the way a signer breaks an NDA.
For instance, a worker may spot a blatant FDA violation at work. Directly reporting it to the FDA would be a good faith violation of the employee’s NDA. The NDA would not have been broken in good faith if the employee had chosen to inform the media first rather than the FDA in order to generate attention for themselves. In spite of any oversight inquiries into the components of the employee’s report, doing so would probably result in legal action from the corporation.
Whistleblowing with an NDA in place
The best course of action is to speak with a whistleblower attorney about your position if you feel you need to expose a problem but doing so would breach a signed NDA. A lawyer would thoroughly examine the NDA used against you and decide which state and federal laws would be applicable to your contract. The majority of NDAs are typically not enforceable; your lawyer may analyze the particular provisions of an NDA that would not hold up in court and determine your justifications for whistleblowing.
Along with generally being unenforceable, whistleblower rights are available despite of contractual obligations. Protected activities include reporting sexual harassment, illegal behavior at work, and taking part in formal legal processes as a witness. If a person engages in such conduct and reports a reasonable issue in good faith, such person shall not be liable for violating an NDA. For reporting fraud, there are also several, comprehensive precautions.
Last but not least, it is always preferable to have an employment law professional analyze an NDA before you sign it. Additionally, if you feel compelled to break an already-existing NDA for a particular cause, an attorney may help you determine any potential legal repercussions you might face. Contact PLBH at (800) 435-7542 for help right away.