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Increase in potentially unlawful nondisclosure agreements

On Behalf of | Nov 20, 2015 | Contract Disputes

Employees in New York are often asked to sign clauses in their contracts that they may not necessarily understand or agree with. Most of the time, these contract points are intended to protect the company. For example, the purpose of a nondisclosure clause is typically to prevent employees from sharing vital company information with others outside the company. However, states HRZone, employees may not realize that sometimes the nondisclosure agreement they are being required to sign is unlawful.

The Washington Post warns that there has been a rising trend with nondisclosure clauses among many businesses that may violate federal whistleblower laws, as well as other regulations. Some contracts may prohibit employees from reporting dangerous or unethical practices to outside sources without first reporting the situation to supervisors within the company. Other times, employees are restricted from saying anything at all, with the spoken or implied understanding that to do so will result in retaliation.

Some are claiming that the strictest of these nondisclosure agreements are essentially gag orders. In one example, a manager for environmental and nuclear safety who was working for a federal contractor at a Washington plant was fired after she brought up safety concerns.

A spokesman with the U.S. Department of Energy claimed the company’s nondisclosure agreements were a violation of whistleblower laws, and that contractors should be able to report incidents of fraud, abuse and waste without worrying about retribution. Businesses have the right to protect their interests, but laws also give employees the right to inform the authorities if a company’s practices are unethical or pose a danger to others.


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