NDAs and free will

Workers can technically break an NDA if they are “under duress.” But is the definition of “under duress” too narrow?

Two days ago, the Wall Street Journal reported about several clients of famed lawyer Gloria Allred. They describe situations where clients felt pressured to sign non-disclosure agreements, giving up their ability to speak their stories in exchange for money. Receiving money for silence is still common in the business world, but Allred’s tactics showed a darker side of the MeToo ecosystem, where certain firms and operators make money off of women’s sexual trauma. “Just get it together,” Allred is quoted as saying to one of her clients who alleged rape against the actor Armie Hammer.

It’s not news that law firms must be clinical in these sorts of cases, and that it is more efficient for the law firm to have clients quickly settle rather than go to trial. Bedside manner is not what they were hired for. But in reading the story, I felt it raised the question of just how psychologically competent these people were when they were at the brink of signing non-disclosure agreements.

NDAs are prevalent across the workforce, despite some backlash against them. Confidentiality provisions are something many workers sign before starting work at a company. For others, a non-disclosure agreement and other forms of non-disparagement clauses is a requirement for a separation agreement, including severance.

Currently, these contracts are completely enforceable and valid—meaning that if you break them to speak about your former employer on social media or to go to a reporter, the company could sue you for breach. The opposing party is also usually released, meaning you can’t pursue further claims after signing the NDA.

There are a few main exceptions to this: one, if the information you are sharing is part of a whistleblower complaint to the Securities and Exchange Commission, or two, if you can prove you signed the agreement “under duress.” The legal definition of “under duress” is currently very narrow. You must have had to be under threat of physical force; for example, someone is holding a gun to your head or locking you in a basement until you sign the contract.

Recently, tech workers and others have been coming to me and other lawyers with immense regret over the agreements they signed even though they were not under physical threat, claiming that they were different people when they signed the agreements. Of course, people have regrets, and contracts need to generally be upheld despite whims or changes in personal circumstance. But this felt different to me.

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One man who worked at a tech company signed an NDA for around $30,000 after a situation with a narcissistic manager sadistically bullied employees. After signing the agreement, he said he felt regret pretty much immediately. It caused a lot of strain on his marriage, and he turned to substance abuse and alcohol, feeling completely dissociated from reality. A few months later, he contemplated taking his life.

I asked psychologist Naomi Murphy about the potential state of one’s mind after enduring workplace trauma. “When we are faced with an intrapersonal conflict it creates a sense of danger and the salience network becomes activated to deal with the perceived threat,” she says. “Our body scans the environment for cues of danger and prepares for flight or fight. Our limbs are prioritized over our ability to think and feel–so we are prone to making impulsive, poorly thought through decisions, misinterpreting information and being emotionally less stable.”

A subsea engineer also contacted me, after signing a significant settlement agreement with a large oil company two years ago due to the experience of what he said was racism, xenophobia, and retaliation on the job for years. The company, in this instance, advised him not to work with a lawyer, because the lawyer would take a chunk of the settlement.

He said he felt a mix of fear and confusion during the process of signing the agreement. “They use a stick and a carrot. They say, we are sorry for what happened to you. They build trust, and try to isolate you.” In his case, they tried to sweeten the deal, telling him they would pay him in seven days if he instantly signed.

He had been taking psychiatric medication from his home country in Egypt that in his words, would make you “love someone who you actually hate.” When asked about sharing his story, he says he feels crippling shame: “the more I share about myself, the more I feel shame.”

Murphy says that shame “is a common response to being harmed and a reason why people seek out therapy. Unfortunately, the default response to being harmed is often to blame ourselves. If we blame ourselves, the world becomes more controllable, If we behave better, do something differently, avoid people or places, maybe this won’t happen again? It can make the world less frightening, make it seem more predictable.”

Louise Godbold runs a non-profit called Echo, which facilitates trauma trainings and works specifically with survivors of sexual abuse. Many of the women she works with are freelancers, contractors or gig workers. She is also a Harvey Weinstein survivor.

Godbold echoes Murphy’s analysis: “Active trauma puts us in survival brain. We don't have access to the higher emotional and thinking brain. The survivor may well not understand what they are signing, or at least not the ramifications, despite their lawyers explaining it all to them. They just can't take it in. I liken the survival state to having your hair on fire. How much can you really process if your hair is on fire?!”

The man who worked for the tech company felt that he was bait-and-switched by his lawyer, who he felt was initially empathetic until they started working together. “There was one point where my lawyer was like: ‘remind me, your salary was $55,000?’ My salary was $155,000! Is that why you’re trying to rush this?”

Lawyers, naturally, are nervous about broadening the definition of “under duress.” Vince White, an employment attorney, talks about people who are not in a “great place” to make decisions, but that the case devalues over time. He also says that we don’t want to “infantilize” people who are capable adults—but also, “goddamn, what’s going on in their head.”

Murphy, the psychologist, notes that NDAs certainly can help people move on, and that as a therapist, she is probably not as privy to those who felt satisfied by their NDAs because they might not be seeking out mental health resources in the first place. Godbold adds that people can “worry the abuser will bad mouth them, so actually an NDA can work to their advantage if neither party speaks of the abuse again.”

Overall, the banning of NDAs in general might be the more comprehensive fix. “The solution here is not to shoehorn the problem into a legal loophole, that will never work,” says lawyer and workplace trauma specialist Michele Simon. “The solution is simple: Ban all NDAs for anything other than legitimate trade secrets, which is how they started. This can absolutely be done, and this is the trend already.”

Currently, there is no recourse for people who signed an NDA without a “gun to their head.” People who signed an agreement could still break them, but under the pressure of a former employer suing them or clawing back settlement payment.

Another measure may be the “sunset clause,” which allows the NDA to expire after a period of time. An attorney I spoke with who worked in BigLaw and reported a pay equity issue remains the only person who I have spoken to who had a “sunset clause” in her contract. When it lifted, she said she felt “reflective of the weight of how hard it had been to have to be silenced for five years.”

But many experts say the current state of NDAs leaves some victims woefully under-protected.

“I think we have very narrow ideas of what constitutes under duress,” says Murphy. “In the legal sense this tends to rely on the idea that someone experiences a threat to their physical integrity. In fact, threats to our psychological integrity, our reputation or ability to work again—the threat of ostracism are all very powerful ways to get someone to sign an NDA.”