Understanding Your NDA (and When It Can Be Broken)

This articles was written by founding partner Stephen M. Kohn, and featureded in Harvard Business Review.

Some NDAs illegally place restrictions on an employee’s ability to report misconduct to government agencies like the U.S. Department of Labor (DOL) or the U.S. Securities and Exchange Commission (SEC). Securities violations, including fraud, insider trading, and market manipulation, are some of the most common forms of misconduct that companies try to prevent employees from reporting. If you ever find yourself in this sticky spot — having signed an NDA that restricts you from blowing the whistle on a securities violation at work — it’s important to know your rights. Most importantly, restrictive NDAs are illegal and you can report misconduct (and an illegal NDA) confidentially to the SEC.