Can a Non-Disclosure Agreement Prevent an Employee Lawsuit?

If you signed a non-disclosure agreement at work and something went wrong — harassment, discrimination, retaliation — you may be wondering whether that signature means you have no options. The short answer is no. Non-disclosure agreements have real limits, and understanding them could be the difference between staying silent and protecting your rights.

What Is a Non-Disclosure Agreement?

A non-disclosure agreement (NDA) is a legally binding contract requiring parties to keep specified information confidential. In the employment context, NDAs are also known as confidentiality agreements, and they are more common than most employees realize. Studies ran by Professor Mark Gough of Penn State University show that about 45% of employees are subject to NDA’s within their company. 

According to Columbia Law School, the core purpose of an NDA is to prevent signing parties from disclosing information to anyone outside the contract. Employers typically use them to protect intellectual property, trade secrets, client data, pricing structures, and more. These are legitimate uses — and in those specific contexts, an NDA can be a reasonable and enforceable tool.

When is an NDA Permissible?

Under the law, non-disclosure agreements serve a valid function when they protect genuinely confidential business information. The Legal Information Institute at Cornell Law School identifies common permissible uses: trade secrets, proprietary business processes, customer information, and financial data.

NDAs are commonly used to reinforce trade secret protection when sensitive business information must be disclosed — for example, to investors or new hires. In these cases, the agreement defines what’s covered, for how long, and what parties are bound by it.

Restrictive confidentiality clauses are also standard in severance packages, merger negotiations, and business partnerships. None of this is inherently problematic — provided the NDA does not cross into territory that the law prohibits.

What an NDA Cannot Do

This is where workplace secrecy has legal limits — and where many employers overstep.

NDAs cannot silence reports of misconduct.

Courts consistently refuse to enforce contract provisions that exist to conceal a crime or shield an employer from the legal consequences of breaking the law. The principle is rooted in public policy: private agreements cannot override the public interest in law enforcement and workplace safety.

Federal legislation backs this up with force.

Under SEC Rule 21F-17, employers are prohibited from using confidentiality agreements to prevent employees from reporting securities violations to regulators. Companies including Activision Blizzard and J.P. Morgan have paid tens of millions in SEC fines for using agreements that discouraged employees from reporting wrongdoing.

NDAs cannot bar discrimination claims. Employees always retain the right to speak and cooperate with the Equal Employment Opportunity Commission and related state civil rights agencies. Filing a complaint with the EEOC is protected regardless of what any confidentiality agreement says.

Non-disparagement limits apply too. In 2023, the National Labor Relations Board ruled in McLaren Macomb that employers violate federal law by even offering severance agreements with broad non-disparagement or confidentiality clauses that could discourage employees from exercising their rights — before a single signature is collected.

The Speak Out Act further narrows the scope. Signed into law in 2022, this federal legislation makes pre-dispute non-disclosure clauses unenforceable when the underlying claim involves sexual harassment or sexual assault. The Tulane University Law School blog notes that while the Act still permits NDAs to protect trade secrets and proprietary information, it explicitly prohibits using them to silence survivors before a dispute is formally raised.

What This Means for Your Claim

If you witnessed or experienced misconduct at work — discrimination, harassment, retaliation, wage theft, safety violations — an NDA you signed does not automatically bar you from taking action. Unenforceable NDA provisions are void by operation of law, meaning a court will treat them as if they were never written.

This is especially important in the following situations:

• You experienced sexual harassment or assault and signed a blanket NDA at hiring.
• You reported financial fraud or securities violations and were asked to keep quiet.
• Your employer retaliated against you for whistleblowing on unsafe conditions.
• You were pressured to sign a severance agreement with confidentiality terms that were too vague.
• You want to file an EEOC discrimination complaint but fear NDA repercussions.

In every one of these scenarios, existing law likely protects your ability to come forward — often regardless of what your agreement says.

How Filippatos Law Can Help

At Filippatos Law, we represent employees whose rights have been violated — and we know that a confidentiality agreement is not the end of the road. As nondisclosure agreement attorneys and a trusted New York employees’ rights lawyer, our firm has extensive experience helping clients navigate claims involving discrimination, harassment, retaliation, wage violations, and whistleblower protections.

If you believe an NDA is being used to suppress a legitimate claim, we can evaluate whether the agreement is enforceable, help you understand your rights under state and federal law, and guide you through the legal process to seek justice — lawfully and effectively.

Please give us a call at 888-9-JOBLAW for a free consultation. We will do our utmost to help secure you the justice you deserve.