What is a non-disclosure agreement (NDA)?

An NDA requires you to keep confidential information secret. "Confidential information" typically means trade secrets, proprietary processes, customer lists, and business strategies. Reasonable NDAs protect legitimate business interests without overreaching.

Are employment NDAs enforceable?

Yes, NDAs are generally enforceable if they: (1) Protect legitimate business secrets, (2) Have reasonable scope (not protecting obvious information), (3) Have reasonable duration (2-3 years, not perpetual). Overly broad NDAs are sometimes challenged in court.

What is an overly broad NDA definition?

Red flag: "Confidential information includes any information you learn at the company, even if publicly available." Good NDA: "Confidential information means trade secrets, non-public customer data, and proprietary processes." Broad definitions trap you and are often unenforceable.

Can my employer prevent me from discussing salary with coworkers?

NO. Federal labor law (National Labor Relations Act) protects your right to discuss wages with coworkers. NDA clauses preventing salary discussion are illegal and unenforceable. Your employer cannot enforce these restrictions.

Can NDAs prevent me from reporting harassment to the EEOC?

NO. NDAs cannot restrict your ability to report illegal conduct (discrimination, harassment, wage theft) to government agencies. However, you cannot disclose confidential information while reporting — give facts without trade secrets.

What is a perpetual NDA?

A perpetual NDA has no end date — it restricts you forever. Red flag. Most courts find perpetual NDAs unreasonable for information that loses value over time. Reasonable: 2-3 years post-employment (or 5 for true trade secrets).

What happens if I violate an NDA?

Your employer can sue for damages and seek an injunction to stop disclosure. Damages depend on harm: loss of customer relationships, competitive disadvantage, etc. If truly intentional, you may owe significant money.

Can I work for a competitor after signing an NDA?

Yes, as long as you do not disclose confidential information. However, if your new role requires using confidential knowledge, there may be overlap. Negotiate NDA carve-out: "I can work for competitors without breaching if I do not use confidential information."

What is garden leave vs NDA?

Garden leave: You are paid but cannot work elsewhere during notice period. NDA: You are restricted from sharing information. Different tools. Garden leave is especially common in UK contracts; NDAs are more common in US employment.

April 21, 2026·11 min read·✓ Updated Apr 2026(quarterly reviews)·By WorkContractReview.com · AI-assisted analysis, human-edited

NDA Red Flags: What Your Employer Cannot Restrict with Non-Disclosure Agreements

Non-disclosure agreements (NDAs) are standard in employment, but many contain overreaching terms that restrict your ability to discuss salary, report harassment, or change jobs. Unlike non-competes, NDAs are often enforceable. This guide shows you which NDA terms are reasonable and which are major red flags.

Key Points in This Guide

1Understand what information is actually confidential
2Identify overly broad NDA definitions
3Recognize unreasonable NDA duration (perpetual clauses)
4Know what NDAs cannot legally restrict
5Understand garden leave vs NDA differences
6Learn what happens if you violate an NDA
7Negotiate NDA carve-outs for legal reporting
8Recognize NDAs designed to silence employees

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About this guide: This article is written and maintained by the WorkContractReview.com editorial team. Where statutes are cited (e.g. Cal. Bus. & Prof. Code §16600, C.R.S. §8-2-113), we link directly to the official legislative source. AI analysis on this site is powered by Claude claude-opus-4-6 by Anthropic. Content is for informational purposes only and does not constitute legal advice. See all cited sources →

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