Nondisclosure agreements, commonly known as NDAs, are contracts that restrict one or more parties from disclosing certain information. In the workplace, an NDA may appear as a stand-alone agreement or as a confidentiality provision within an employment contract, offer letter, severance agreement, or settlement agreement. Common provisions may require employees to protect trade secrets, proprietary business information, client information, financial data, or other sensitive materials. Some agreements also contain nondisparagement clauses or restrictions on discussing workplace matters.
Confidentiality provisions are particularly common in the entertainment industry. Film studios, production companies, record labels, talent agencies, and other entertainment businesses routinely handle information that has significant commercial value before it becomes public. An employee may have access to an unreleased script, casting information, production plans, celebrity information, financial arrangements, or other proprietary materials. An NDA can serve a legitimate purpose by protecting that information from unauthorized disclosure. Problems arise, however, when an employee is led to believe that the same agreement prevents them from speaking about sexual harassment or other potentially unlawful conduct.
A production assistant, actor, crew member, executive assistant, or other worker may experience harassment and hesitate to report it because they previously signed a broad confidentiality agreement. An employer or supervisor may reinforce that fear by reminding the worker that everything that happens on the production is supposedly confidential. But an NDA sexual harassment issue is more complicated than simply asking whether the employee signed a contract.
Not every confidentiality provision is enforceable in every circumstance. California has enacted significant restrictions on agreements that interfere with an employee’s ability to discuss or disclose unlawful workplace conduct. California Government Code section 12964.5, for example, limits contractual provisions that have the purpose or effect of denying employees the right to disclose information about unlawful acts in the workplace, including harassment and discrimination.
California law also protects employees who oppose or report conduct prohibited by the Fair Employment and Housing Act (“FEHA”). Government Code section 12940 makes it unlawful to retaliate against someone for opposing prohibited practices or participating in proceedings concerning those practices. The California Civil Rights Department likewise identifies speaking out against harassment, filing a complaint, and participating in an investigation as examples of protected activity. As a result, an employee who signed an NDA should not automatically assume that the agreement prevents them from reporting sexual harassment or seeking legal advice.
Company Threats Against Reporting
The entertainment industry can create particular pressure to remain silent. Many workers move from one short-term production or project to another, and future employment may depend heavily on professional relationships, recommendations, and reputation. A worker may therefore worry not only about losing a current job, but also about being excluded from future opportunities.
In some cases, an employer, manager, producer, or other person may expressly invoke an NDA after an employee complains about harassment. A worker may be told that reporting what happened could result in termination, the loss of a future project, a lawsuit for breach of contract, financial penalties, or an obligation to repay compensation. Others may be warned that discussing the misconduct could harm their reputation or make other companies reluctant to hire them. These threats can be powerful. They do not, however, necessarily establish that the employer’s interpretation of the NDA is legally correct.
There is an important distinction between legitimate confidential business information and information concerning potentially unlawful workplace conduct. A production company may have a valid interest in preventing someone from leaking an unreleased script or disclosing proprietary financial information. That does not necessarily give the company the right to use the same confidentiality provision to prevent the worker from discussing conduct that they reasonably believe constitutes sexual harassment, discrimination, retaliation, or another unlawful workplace practice.
California Government Code section 12964.5 specifically provides that employers may continue protecting trade secrets, proprietary information, and confidential information that does not involve unlawful acts in the workplace. At the same time, the statute restricts contractual provisions that interfere with an employee’s ability to disclose information about unlawful conduct.
Workers also should not assume that an NDA prevents them from consulting an attorney or making an appropriate report to a governmental agency or law enforcement. The legality of a particular disclosure can depend on the agreement and the circumstances, so employees should obtain advice before releasing confidential documents publicly or broadly distributing workplace materials.
Reporting harassment may also trigger separate protections against retaliation. California law prohibits retaliation against individuals for opposing practices forbidden by FEHA or for filing a complaint, testifying, or assisting in a proceeding under the law. Retaliation may
take many forms. It is not necessarily limited to firing an employee. Depending on the circumstances, discipline, reduced hours, undesirable assignments, exclusion from opportunities, or other employment consequences may also raise concerns. The Civil Rights Department specifically recognizes that adverse actions taken because someone spoke out against harassment can constitute unlawful retaliation.
An employee faced with a threat based on an NDA should therefore consider having the agreement reviewed rather than assuming they have no right to speak.
California NDA Laws
California has adopted several laws aimed at preventing confidentiality provisions from being used to conceal unlawful workplace conduct.
Government Code section 12964.5 provides that an employer generally may not require an employee, as a condition of employment or continued employment, to sign a nondisparagement agreement or other document that has the purpose or effect of denying the employee the right to disclose information about unlawful acts in the workplace. The statute defines such information to include harassment, discrimination, and other conduct the employee has reasonable cause to believe is unlawful.
The law also requires certain agreements restricting discussion of workplace conditions to contain language making clear that the agreement does not prevent the worker from discussing or disclosing information about unlawful acts in the workplace. Similar protections apply to agreements related to an employee’s separation from employment. An employer offering a covered separation agreement must also notify the worker of the right to consult an attorney and generally provide at least five business days to consider the agreement.
Settlement agreements involve additional considerations. California Code of Civil Procedure section 1001 prohibits certain settlement provisions that prevent or restrict disclosure of factual information related to claims filed in a civil action or administrative complaint involving sexual assault, sexual harassment, workplace harassment or discrimination, or retaliation for reporting or opposing harassment or discrimination.
That does not mean every aspect of a settlement must become public. California law expressly permits provisions keeping the amount paid in settlement confidential. In certain circumstances, a settlement may also protect a claimant’s identity when the claimant requests that protection. These distinctions matter. California law does not prohibit NDAs altogether. A lawful confidentiality agreement may continue to protect:
· Trade secrets and proprietary business information;
· Confidential production, financial, or commercial information unrelated to unlawful workplace conduct; and
· Certain settlement terms, including the amount paid in a settlement.
What an employer generally cannot do is treat confidentiality language as an unlimited tool for suppressing information about unlawful workplace acts.
This is why an employee should not assume that broad contractual wording—such as a clause requiring all information learned during employment to remain confidential—necessarily answers whether the employee can report harassment. The enforceability and scope of the provision may depend on when the agreement was signed, the type of agreement involved, the information being disclosed, and the purpose of the disclosure.
Anyone dealing with a confidentiality agreement workplace harassment dispute should therefore consider having the actual contract reviewed before deciding that an NDA either completely prohibits disclosure or can simply be ignored.
How an Employment Attorney Can Help
Questions involving NDAs and workplace harassment are highly dependent on the particular agreement and surrounding facts. A California employment attorney can evaluate both the contractual restrictions and the underlying misconduct.
An attorney may review an NDA, employment agreement, severance agreement, settlement agreement, or nondisparagement clause and determine whether particular provisions conflict with California law. The attorney can also identify appropriate avenues for reporting misconduct and evaluate potential claims for sexual harassment, hostile work environment, discrimination, failure to prevent harassment, or retaliation.
This can be particularly important when an employer is threatening legal action based on confidentiality. Rather than responding immediately or releasing information publicly, a worker can obtain advice about what the agreement actually covers and which portions may remain enforceable.
An attorney can also assist in preserving evidence. Entertainment-industry harassment cases may involve text messages, emails, direct messages, call sheets, production communications, complaints to supervisors, photographs, schedules, witness information, or other records. Preserving relevant evidence can become important if the dispute later results in an administrative complaint, lawsuit, or settlement negotiations.
Hollywood employment law can also involve unusual working relationships. A worker may be hired for a single production, paid through a production entity, classified as an independent contractor, employed through an agency, or working alongside individuals employed by different companies. California’s harassment protections can extend beyond conventional employees in certain circumstances. Government Code section 12940’s harassment provisions expressly address employees, applicants, unpaid interns, volunteers, and certain persons providing services pursuant to contract.
An attorney can examine those relationships and determine which individuals or entities may have legal responsibilities.
Workers should also act promptly. Employment claims are subject to filing deadlines, and waiting because of uncertainty about an NDA can create additional complications. The California Civil Rights Department currently states that complaints involving employment discrimination, harassment, or retaliation generally must be filed within three years of the last unlawful act, although different rules or deadlines may apply depending on the claims and circumstances.
Conclusion
Signing an NDA does not necessarily mean that an entertainment-industry worker has surrendered the right to report sexual harassment or pursue a legal claim. California recognizes legitimate reasons for protecting confidential business information, but it also places significant limits on attempts to use contractual confidentiality to silence workers concerning unlawful acts.
The distinction is important. An employee may still have obligations concerning trade secrets, proprietary materials, unreleased productions, or other genuine business confidences even when a provision purporting to restrict discussion of harassment is unenforceable.
Workers who are uncertain about their rights should therefore avoid making assumptions in either direction. Before remaining silent because of an NDA—or publicly releasing confidential information because they believe the agreement is invalid—they can have the agreement and underlying facts reviewed by an employment attorney.
An attorney can determine how California’s confidentiality and retaliation protections apply, assess potential sexual harassment or retaliation claims, and help the worker identify an appropriate path for reporting misconduct and pursuing available legal remedies.
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