Are NDAs Enforceable in California? (2026)

What Is a Non-Disclosure Agreement

For those wondering exactly what is an NDA, it is a contract that requires one or more parties to keep certain information private. Businesses use NDAs to protect trade secrets, client lists, product designs, and other sensitive details. Employees, contractors, and business partners often sign them at the start of a working relationship, sometimes as part of a standard contract of employment.

NDAs come in two main forms:

• Unilateral NDAs, where only one party agrees to keep information confidential.
• Mutual NDAs, where both parties share and protect information.

While NDAs serve legitimate business purposes, California has placed firm boundaries on how far they can go.

California Laws That Limit NDA Use

So, are NDAs enforceable in California? Generally, yes – but several statutes carve out important exceptions, especially in cases involving misconduct.

Under California Code of Civil Procedure § 1001, a settlement agreement cannot prevent the disclosure of factual information related to a claim filed in a civil action or an administrative complaint regarding:

• Sexual assault claims
• Sexual harassment as defined in Civil Code Section 51.9
• Workplace harassment, discrimination, or retaliation under Government Code Section 12940
• Housing-related harassment or discrimination under Government Code Section 12955

The claimant may still request that their identity remain confidential, but the underlying facts must remain disclosable.

California Code of Civil Procedure § 1002 goes further, banning confidentiality clauses in settlements involving acts that could be prosecuted as felony sex offenses, felony childhood sexual abuse, felony sexual exploitation of a minor, and felony assault or battery causing great bodily injury against an elder or dependent adult.

The Silenced No More Act, codified at Government Code § 12964.5, prohibits employers from requiring employees to sign NDAs or non-disparagement agreements that block them from discussing unlawful conduct in the workplace. Any such separation agreement must include language confirming the employee's right to disclose information about harassment, discrimination, or other illegal acts.

Finally, California Civil Code § 1670.11 voids any contract provision that waives a party's right to testify in an administrative, legislative, or judicial proceeding about criminal conduct or sexual harassment when called by subpoena, court order, or a written request from an administrative agency or the legislature.

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Requirements That Make an NDA Enforceable in California

A California NDA generally holds up in court when it meets standard contract principles. Courts typically look for:

• Clear and specific terms defining what information is confidential
• Lawful purpose that does not conflict with public policy
• Consideration, meaning something of value exchanged between the parties
• Reasonable scope in duration, geography, and subject matter
• Voluntary agreement signed without fraud, coercion, or misrepresentation

Employers offering separation agreements must also give employees at least five business days to consult an attorney before signing, per Government Code § 12964.5.

When a California NDA Becomes Unenforceable

An NDA may fall apart in court for several reasons. Provisions that try to silence someone about harassment, discrimination, retaliation, or sexual assault are void as a matter of law. Overly broad clauses – such as those preventing employees from discussing wages or working conditions – also fail.

Other red flags include vague definitions of confidential information, indefinite time periods, and clauses that block testimony in legal proceedings. If a court finds the NDA was signed under pressure or without fair notice, it may toss the agreement entirely.

It is worth noting that NDAs can still protect the dollar amount of a settlement, even when the underlying facts must remain disclosable.

Consequences of Breaching an NDA in California

If you are wondering what happens if you break an NDA, be aware that violating a valid agreement can carry real costs. The non-breaching party may sue for monetary damages tied to actual losses, request an injunction stopping further disclosure, or pursue specific performance. In some cases, courts award attorney's fees if the NDA includes a fee-shifting clause.

That said, disclosures protected by law – like reporting harassment to a government agency – generally cannot trigger liability, even if the NDA tries to prohibit them.

Draft Your California NDA With Help From ConsumerShield

Drafting an NDA that holds up in California takes careful attention to the state's evolving laws. Finding a legally sound California NDA template can save time and reduce the risk of creating an unenforceable contract. For help drafting yours, explore ConsumerShield's forms and guides today.