Supporting Market Accountability, Workplace Equity, and Fair Competition by Reining in Non-Disclosure Agreements

13 Pages Posted: 3 Feb 2022

See all articles by Rachel S. Arnow-Richman

Rachel S. Arnow-Richman

University of Florida Levin College of Law

Gretchen Carlson

Lift Our Voices

Orly Lobel

University of San Diego School of Law

Julie Roginsky

Lift Our Voices

Jodi L. Short

UC Hastings Law

Evan Starr

University of Maryland Robert H Smith School of Business

Date Written: January 31, 2022

Abstract

Overuse of non-disclosure agreements (NDAs) is a pervasive problem in the United States. Companies apply these silencing tools to prevent their workers from sharing critical information with one another and the public. This in turn threatens economic growth, limits competition, and inhibits workplace equity. Workers need reliable information about corporate practices to assess job quality, ensure personal safety, and obtain pay commensurate with their worth. The public needs information about corporate practices to decide how to use their investment and purchasing power. Yet existing laws give companies enormous latitude to designate information as confidential, allowing them to impose NDAs and other contract clauses and internal policies that prevent workers from sharing information with those who need to know.

It is time for government to rein in corporate secrecy. The #MeToo movement revealed how NDAs enable and perpetuate misconduct at work, prompting public outrage and support for legislative action. New empirical evidence has exposed just how widely NDAs are being used in the corporate world: researchers estimate that between 33% and 57% of U.S. workers are constrained by an NDA or similar mechanism. At recent hearings and public events, regulators have signaled their concern about the anti-competitive effects of restrictive employment agreements. Policymakers should seize this moment of support to pursue a comprehensive legislative and multi-agency agenda limiting inappropriate use of NDAs. A strong action plan should include proactive enforcement of existing laws governing NDAs; new legislation prohibiting the most harmful uses of NDAs; and interagency collaboration to educate the public, collect data, and support research on impacts of corporate secrecy practices. Together, these efforts to limit NDA abuse will promote market accountability, workplace equity, and fair competition.

Keywords: Non-Disclosure Agreements, Secrecy

JEL Classification: M55, K31, J58

Suggested Citation

Arnow-Richman, Rachel S. and Carlson, Gretchen and Lobel, Orly and Roginsky, Julie and Short, Jodi L. and Starr, Evan, Supporting Market Accountability, Workplace Equity, and Fair Competition by Reining in Non-Disclosure Agreements (January 31, 2022). Day One Project, UC Hastings Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=4022812

Rachel S. Arnow-Richman

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

Gretchen Carlson

Lift Our Voices ( email )

New York, NY
United States

Orly Lobel

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

HOME PAGE: http://www.orlylobel.com/

Julie Roginsky

Lift Our Voices ( email )

New York, NY
United States

Jodi L. Short

UC Hastings Law ( email )

200 McAllister Street
San Francisco, CA 94102
United States

Evan Starr (Contact Author)

University of Maryland Robert H Smith School of Business ( email )

United States
(301) 405-2320 (Phone)

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