Are NDAs Enforceable? When You Can And Can’t Talk (2026)
Contributor
Reviewed By Adam Ramirez, J.D.
Editor
Summary
- Non-disclosure agreements are valuable tools to protect businesses
- These agreements can be used validly in certain situations
- Many states have outlawed NDAs when settling specific legal disputes
Non-disclosure agreements (NDAs) are contracts that businesses use to restrict the release of information. However, their enforceability becomes questionable when they are used to silence wronged parties in lawsuits. Here’s a closer look.
What Is a Non-Disclosure Agreement and How Does It Work?
What is an NDA? A party to an NDA agrees not to disclose specified information. If they disclose the information, the other party can sue them to stop further disclosure and recover damages for the harm caused.
Key Requirements for an NDA to Be Legally Enforceable
Like all agreements, an NDA must meet certain standards to be valid. Specifically, the contract must have these characteristics:
- Mutual assent
- Consideration
- Clear terms understood by all parties
- Parties with the legal capacity to enter into a contract
Mutual assent means that one party made an offer and the other party voluntarily agreed to it. This may follow several rounds of negotiation. Moreover, both parties must be competent adults.
Consideration refers to the promises supporting the agreement. In a pre-dispute NDA, an employer might offer employment in exchange for a promise to keep trade secrets confidential. In a post-dispute NDA, consideration might involve one party offering money in exchange for the other party’s silence.
Common Reasons an NDA May Not Hold Up in Court
If any of the elements are missing, the NDA would be invalid. For example, if one party is a minor, the NDA is invalid without their guardian’s signature.
Another common ground of invalidity is vagueness. If the parties cannot interpret the restrictions in the agreement, a court may invalidate it.
When Employers Cannot Enforce NDAs Against Employees
A court can refuse to enforce an NDA if the subject matter is illegal. Many states have determined that NDAs are being used to silence survivors of harassment, abuse and assault. These restrictions enable bad actors to perpetrate these acts, since their discriminatory or illegal actions are never exposed publicly.
For instance, Washington has one of the most restrictive laws on NDA use. This law blocks NDAs in cases restricting discussion of any of these types of conduct:
- Discrimination
- Harassment
- Retaliation
- Wage and hour violation
- Sexual assault
- Acts that violate a clear public policy
If an agreement is unenforceable, the party is free to disclose the restricted information, despite an NDA.
What to Do Before Signing or Challenging an NDA
When are NDAs enforceable where you live? The laws for enforcing NDAs vary by state. Even within a state, NDAs may be allowed for certain subjects and disallowed for others. Make sure to read all NDAs carefully and consult a contract lawyer before signing any agreement.
Looking for NDA Help?
An NDA is a complex contract, but ConsumerShield offers a range of tools to help you navigate your legal issues. Explore our available resources today.
What Is An NDA? Knowledge Base
Read the latest information on What Is An NDA? and find answers to your questions. Currently there are 18 topics about What Is An NDA? .
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Frequently Asked Questions
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Business law allows companies to use NDAs with employees to protect confidential business information and trade secrets. Examples could include a chemical formula or software program.
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The First Amendment only prohibits government restriction of your speech. It doesn’t prohibit you from agreeing with another party to limit your speech.
