Get Rid of Non-Disclosure Agreements

NDAs have become the legal workaround for rich people like Donald Trump to prevent exposure of their potential misdeeds.

Almost lost amid each successive round of shocking, but unsurprising news about our president has been the fact that his lawyers are yet again enforcing non-disclosure agreements against revelations of his personal behavior with women.

While disclosure in this case might be justified on public interest grounds—principally, the commander in chief’s susceptibility to blackmail by foreign intelligence agencies—the entire subject of non-disclosure agreements (NDAs) should be a matter of urgent public debate. Unfortunately, they have been treated, like the weather, as something nobody can do anything about, but NDAs—in their current, virtually unlimited form—should be banned.

Broadly speaking, there are two kinds of these agreements. The first is required by employers, contractors, or other parties as a condition of employment, contract, or access. The second type arises from the settlement of a civil suit, and typically requires non-disclosure as a quid pro quo from the injured party as a condition of receiving financial compensation.

NDAs have become increasingly common in employer-employee relationships, business interactions, and even—as we see with Trump—purely private matters. They represent the misuse of our justice system to legally coerce an unequal relationship between those who have money and those who don’t. As such, they are a court-sanctioned extorting of a person’s silence that serve no public benefit. It’s no surprise that NDAs essentially enabled Harvey Weinstein’s serial predation.

NDAs that arise from a lawsuit settlement can present a real danger to the public by preventing victims from ever speaking about the wrong done to them. It allows a wrongdoer, if rich enough, to use the justice system to buy the silence of the wronged. If the accused party is a sexual predator, or financial fraudster, or an employer who endangers the health or safety of employees, NDAs set up perverse incentives to continue such action for as long as the wrongdoer can buy silence from the courts.

State legislatures and courts need to drastically limit contractual NDAs to the protection of legitimate business interests—such as trade secrets and unique business processes—or the maintenance of client confidentiality in sensitive areas like medicine or law. More states should adopt Florida’s “sunshine in litigation” statute that prohibits courts from granting NDAs that could result in a “public hazard.”

It’s ridiculous that mere “disparagement” of a boss or company can be legally actionable through an NDA; why should somebody’s opinion about someone or something be a matter for the courts? Likewise, court settlement NDAs should be limited to cases in which exposure of the details serves no public benefit, or when the injured party may wish to guard her own privacy, such as in certain sexual harassment suits.

Unfortunately, but predictably, some Republican-run legislatures are moving in the opposite direction. Several states have enacted so-called food disparagement laws to prevent animal rights groups from filming unsafe, unsanitary, or inhumane conditions in the meat processing industry. And as one might expect, the Heritage Foundation has long been lobbying against any attempt to more tightly define contractual non-disclosure.

If an employee or outside party should actually make injuriously false statements about someone, the injured party still has recourse: he can sue for libel. Fortunately, our libel laws require that a successful libel action must prove that a statement is false and defamatory, and stated with a reckless or knowing disregard for the truth. As such, U.S. libel statutes cannot be used as a legal mechanism to shut down free speech.

Over 70 years ago, George Orwell wrote that libel suits in England were simply “a racket.” While America never adopted the odious English libel system, NDAs have gradually become the legal workaround for rich people and corporations to prevent truthful criticism of themselves or exposure of their potential misdeeds.

If a noxious character like Donald Trump needs constant recourse to non-disclosure agreements, it’s long past time to declare them null and void.

Mike Lofgren

Mike Lofgren is a former career congressional staff member who served on the House and Senate budget committees. His latest book is The Deep State: The Fall of the Constitution and the Rise of a Shadow Government.