Don’t Fear NDAs

Don't Fear NDAs


Non-disclosure agreements (NDAs), frequently found in employment, severance, and settlement contracts, safeguard confidential information within the workplace. However, NDAs must not obstruct an employee’s right to report criminal activity to law enforcement or regulatory agencies. An NDA becomes unlawful when it prevents a current or former employee from testifying about workplace misconduct they have witnessed.

In the late 20th century, the nuclear power industry heavily relied on NDAs. This changed when Joseph Macktal Jr. was dismissed for voicing safety concerns, only to have his whistleblower case dismissed due to a restrictive NDA in his settlement agreement. Macktal subsequently exposed the agreement, inspiring others in the industry to come forward. In response, the SEC enacted regulations prohibiting such restrictive NDAs, and a court determined that this included agreements that “created a chill on speech concerning matters of public interest.”

Practice Tips

The following are key statutes, regulations, and court cases on enforcement of NDAs:


  • The case record for the Macktal case is docketed at the U.S. Department of Labor Office of Administrative Law Judges, Case Number 86-ERA-23
  • The appeals court case is Macktal v. Secretary of Labor, 923 F.2d 1150 (5th Cir. 1991)
  • The hearings on Macktal were published by the U.S. Senate Subcommittee on Nuclear Regulation, Hearings on Secret Settlement Agreements Restricting Testimony at Comanche Peak Nuclear Power Plant, Senate Hearing No. 101-90 (May 4, 1989)

Federal Obstruction of Justice statute:

Dodd-Frank Act rules restricting NDAs:

Defend Trade Secrets Act:

Other Cases:

  • Gilmer v. Interstate, 500 U.S. 20 (1991) (leading case upholding enforcement of mandatory arbitration of employment disputes)
  • EEOC v. Waffle House, 534 U.S. 279 (2002) (arbitration agreement did not prevent federal agencies from filing lawsuits to defend employees)
  • Doyle v. DOL, 285 F.3d 243 (3rd Cir. 2002) (waiver of rights to file nuclear whistleblower claim unenforceable)

The Securities and Exchange Commission has enforced strict rules prohibiting restrictions on employee whistleblowing. See Office of Compliance Inspections and Examinations, “Examining Whistleblower Rule Compliance, VI National Examination Risk Alert 1″ (Oct. 24, 2016) (explaining commission decisions on restrictive agreements and warning companies of various improper contractual methods being employed to prevent or intimidate employees from contacting SEC or applying for rewards).

The SEC has sanctioned companies for having employees sign restrictive nondisclosure agreements:

“It is the right, as we as the duty, of every citizen…to communicate to the executive officers any information which he has of the commission of an offense against those laws…the right does not depend upon any of the amendments of the Constitution, but arises out of the creation and establishment by the Constitution itself of a national government.”

Ir re Quarles and Butler, U.S. Supreme Court (1895)

Quick Links

  • 17 C.F.R. Part 205, Rules of Professional Responsibility for Attorneys under the Securities and Exchange Commission
  • Scope of protected activity is based on law for which you are filing a claim. This is explained in Rules 4 – 15, 16-19

Frequently Asked Questions

Order Your Copy Today!

All purchases or donations proceeds go to support the National Whistleblower Center, a 501(c)(3) non-profit organization dedicated to supporting whistleblowers.

What's Inside

This books covers all federal and state laws regarding whistleblowing, including protections, rewards, and procedures for whistleblowing.

Meet the Author

Stephen M. Kohn is considered the world’s leading authority on international whistleblower law, and behind some of todays modern whistleblower rules.

Introduction: The Revolutionary Roots of Modern Whistleblowing

Law Library

The Law Library is a free companion to the Rules for Whistleblowers, complete with relevant whistleblower cases and important links and resources.

Speaking Engagement

Stephen Kohn enjoys speaking to universities of all sizes, students and professionals, the media, general public, and government officials.

Shipping is to the United States Only

For international orders, please contact