The Trump Administration has proposed requiring current and future federal workers to sign nondisclosure agreements (NDAs) aimed at reducing unauthorized disclosures of non-public government information. The proposal was posted through the Office of Personnel Management and is framed as a government-wide effort to formalize confidentiality obligations, deter media leaks, and preserve the government’s ability to impose discipline or pursue other remedies for unauthorized disclosures. The proposal would preserve legally protected disclosures, including whistleblower activity, but critics have questioned whether broad NDAs for public employees could chill protected speech or conflict with existing statutory protections.

Although the federal-government context raises unique constitutional and civil-service issues, the proposal offers a useful reminder for private employers: carefully drafted confidentiality agreements remain an important risk-management tool. Private employers routinely possess competitively sensitive information, including customer lists, pricing models, financial data, source code, product roadmaps, business strategies, personnel information, acquisition plans, and investigation materials. An NDA can help define what information is confidential, remind employees of their obligations, and provide a contractual remedy if confidential information is misused.

Private employers may want to consider NDAs for several reasons:

• First, NDAs help protect trade secrets and proprietary information. While trade secret law may provide remedies even without an NDA, a written agreement strengthens the employer’s position by showing that the company took reasonable steps to maintain secrecy. That evidence can be important in litigation involving misappropriation, unfair competition, or employee departures.
   
• Second, NDAs reduce ambiguity. Employees often underestimate what information belongs to their employer, especially in hybrid, remote, or bring-your-own-device work environments. A well-drafted NDA can identify covered categories of information, prohibit unauthorized copying or disclosure, require return or deletion of materials upon separation, and clarify that obligations continue after employment ends.
   
• Third, NDAs can support client, vendor, and regulatory obligations. Many companies are contractually required to protect customer information, health information, financial information, or other sensitive data. Employee confidentiality agreements help demonstrate that the company has implemented internal controls consistent with those obligations.
   
• Fourth, NDAs can protect internal investigations and crisis-response work. Employers often need employees to handle privileged, sensitive, or reputationally significant information. Confidentiality obligations can reduce the risk that preliminary findings, witness statements, legal advice, or incomplete information will be distributed outside appropriate channels.
   
• Fifth, NDAs may deter intentional leaks and provide leverage when misuse occurs. While no agreement prevents all misconduct, an NDA gives the employer a clear basis for discipline, injunctive relief, damages, or other remedies when confidential information is improperly disclosed.

Employers should not, however, use overbroad NDAs. Agreements should preserve rights to report suspected legal violations to government agencies, participate in investigations, file administrative charges, engage in protected concerted activity under the National Labor Relations Act, and make disclosures protected by whistleblower laws. The NLRB has scrutinized overly broad confidentiality provisions that may chill Section 7 rights, and the SEC has enforced Rule 21F-17 against agreements that impede communications with the SEC. Employers should also include the Defend Trade Secrets Act whistleblower-immunity notice in agreements governing trade secrets or confidential information.

Employers should not impose the broadest NDA possible. Rather, employers should use targeted, plain-language confidentiality agreements tailored to their business, workforce, industry, and applicable law. Properly drafted NDAs can protect valuable business information without unlawfully restricting employees’ protected rights.

For more information, please contact Mike R. Rahmn.