Question

Is an NDA enforceable?

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Curated Intelligence
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Answer

A non-disclosure agreement is a contract restricting what one or both parties may disclose. It is generally enforceable as a contract — but there are significant limits, and some uses are void or improper.

Where NDAs are legitimate and enforceable: protecting trade secrets, commercially sensitive information, client lists, unreleased products, terms of a commercial deal, and confidential information shared during negotiations.

What limits enforceability:

Excessive scope. A clause covering everything indefinitely, with no definition of the confidential information and no time limit, is more likely to be found unreasonable and unenforceable.

Information already public, or independently obtained.

No legitimate interest to protect.

Where an NDA cannot lawfully prevent disclosure:

Protected disclosures (whistleblowing). In the UK, any provision purporting to prevent a worker making a protected disclosure under the Public Interest Disclosure Act is void. An NDA cannot silence a report about wrongdoing in the public interest.

Reporting a crime. NDAs cannot prevent reporting criminal conduct to the police, and provisions attempting to do so are unenforceable. Legislation has been introduced in several jurisdictions to put this beyond doubt.

Regulatory disclosure. Reporting to a regulator such as the FCA, HSE or a professional body.

Cooperating with investigations, or giving evidence in legal proceedings.

Disclosure to obtain legal or medical advice, or to close family in some contexts.

The controversy over misuse. NDAs have been used improperly in settlement agreements to prevent employees discussing harassment, discrimination and abuse. This attracted substantial criticism following high-profile cases, and regulators including the Solicitors Regulation Authority have issued warnings to solicitors about drafting improper clauses. Reform in this area is ongoing.

If you are asked to sign one covering a dispute or settlement, take independent legal advice — settlement agreements in employment require it for validity — and check what it does not prevent you doing.

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