Most employee NDAs are recycled from templates older than the laws that now govern them. Since 2016, federal law has added a mandatory whistleblower notice, the NLRB has cracked down on overbroad confidentiality, and the Speak Out Act rewrote what NDAs can cover. Here are the seven problems attorneys — on both sides — look for first.
Why it matters: The Defend Trade Secrets Act (18 U.S.C. § 1833(b)) grants employees immunity for disclosing trade secrets confidentially to government officials or attorneys to report suspected lawbreaking. Agreements signed after May 2016 that govern trade secrets or confidential information must give notice of this immunity. Omit it, and if you ever sue that employee for trade-secret misappropriation, you forfeit exemplary (double) damages and attorney's fees — often the largest part of the recovery.
Check: The NDA contains the § 1833(b) notice (or cross-references a policy document that does, which the statute permits).
Why it matters: Non-supervisory employees have a federally protected right to discuss wages, hours, and working conditions. Confidentiality language broad enough to chill those discussions — "all personnel information," "compensation data," "workplace matters" — is unlawful under the NLRA, and since the Board's 2023 McLaren Macomb decision, merely offering a severance agreement with overbroad confidentiality or non-disparagement terms can be an unfair labor practice.
Check: The definition of confidential information excludes wages and working conditions, and the agreement includes an express Section 7 carve-out.
Why it matters: The federal Speak Out Act (2022) makes pre-dispute NDAs and non-disparagement clauses unenforceable as to later sexual assault and sexual harassment disputes. States go further: California's Silenced No More Act (SB 331), Washington, and Illinois restrict nondisclosure of all forms of harassment, discrimination, and retaliation — including in severance and settlement agreements. A clause that purports to silence protected disclosures isn't just unenforceable; in some states it's an independent violation.
Check: The NDA expressly excludes disclosures about unlawful conduct, harassment, and discrimination, with state-specific language where employees work in restrictive states.
Why it matters: The SEC has fined companies under Rule 21F-17 simply for maintaining agreements that could impede employees from reporting to the Commission — no actual silencing required. The EEOC, NLRB, and OSHA take similar positions. Modern NDAs need an express carve-out: nothing in the agreement limits communicating with, filing charges with, or participating in investigations by government agencies, without notice to the employer.
Check: A protected-activity carve-out covering government agencies exists and doesn't require advance notice to the company.
Why it matters: A definition that sweeps in "any information learned during employment" protects nothing, because courts refuse to enforce restrictions that would prevent someone from working in their field at all — and judges in states hostile to restrictive covenants will strike rather than narrow the clause. Overbreadth also undermines trade-secret claims: if everything is confidential, you can't show you took reasonable measures to protect the things that actually are.
Check: The definition identifies categories of genuinely sensitive information and excludes what's publicly known, independently developed, or general skill and experience.
Why it matters: Trade secrets can be protected indefinitely — as long as they stay secret. But perpetual restrictions on ordinary confidential business information (pricing, customer preferences, internal processes that aren't trade secrets) strike many courts as unreasonable and can taint the whole clause. The standard fix is a two-tier term: indefinite for trade secrets, a defined period of years for everything else.
Check: The agreement distinguishes trade secrets from other confidential information and doesn't apply "forever" to both.
Why it matters: Choosing your headquarters state's law and courts feels natural and often fails. California Labor Code § 925 generally voids clauses requiring California-based employees to litigate elsewhere or under another state's law, and other states protect their residents similarly. An NDA can also cross the line into functioning as a non-compete — a problem in California, Minnesota, North Dakota, and Oklahoma, where employment non-competes are banned for most workers.
Check: Choice-of-law and forum clauses account for where employees actually work, and no clause restricts future employment so broadly it operates as a de facto non-compete.
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A federally required notice (18 U.S.C. § 1833(b)) telling employees they have immunity for confidentially disclosing trade secrets to the government or an attorney to report suspected lawbreaking. Without it, an employer suing that employee for trade-secret misappropriation cannot recover exemplary damages or attorney's fees.
No. NLRA Section 7 protects non-supervisory employees' discussions of wages, hours, and working conditions, and the NLRB treats confidentiality language that chills those discussions as unlawful — including in severance agreements.
Pre-dispute NDAs cannot be enforced against later sexual assault or harassment disputes under the federal Speak Out Act, and several states restrict harassment and discrimination NDAs even in settlements. Agreements need express exclusions.
Indefinitely for genuine trade secrets; for ordinary confidential information, many courts expect a defined, reasonable term. The common approach is a two-tier duration clause.
No — an NDA restricts information use, a non-compete restricts employment. But NDA language broad enough to prevent someone from working in their field can be treated as a de facto non-compete and struck down in states that ban them.
This guide is general information, not legal advice, and reading it does not create an attorney-client relationship. Employment law varies by state and changes frequently; consult a licensed employment attorney about your specific situation. DefensibleHR.ai scan results are AI-generated starting points for review, not a substitute for counsel.