When NDAs Go Too Far

Non-disclosure agreements (NDAs) are often used to protect confidential information in business and beyond. They can be valuable tools for protecting trade secrets, intellectual property, and even personal privacy. However, the question of who gets to define what\’s \”confidential\” is a crucial one. Can one party simply dictate the terms of an NDA, or are there limits to what information can be kept under wraps?

This blog delves into the factors that can invalidate an NDA, using the infamous case of the Donald Trump-Stormy Daniels agreement as a springboard for discussion.

When NDAs Crumble

Several issues can weaken an NDA\’s enforceability:

• Oppressive or Overreaching: NDAs that impose unreasonable restrictions on one party\’s speech or actions, particularly unrelated to the legitimate confidential information, can be deemed unfair and unconscionable.
• Protecting Irrelevant Information: If the information claimed as confidential is not actually crucial to the agreement\’s purpose or holds little value, courts may view the NDA as an attempt to stifle legitimate speech or activity.
• Misidentification of Parties: If the wrong party is named as bound by the NDA or the wrong party is seeking its enforcement, the agreement loses its legal footing.

The Trump-Daniels Case

The NDA signed by Stormy Daniels in 2016, allegedly silencing her about an affair with then-candidate Donald Trump, became a prime example of a potentially questionable agreement. While the specific details remain confidential (thanks to a separate arbitration ruling), legal experts raised concerns about its enforceability:

• Oppressiveness: The alleged $130,000 payment could be seen as coercion, silencing Daniels on matters of substantial public interest.
• Potential Overreach: Questions arose about whether the NDA\’s scope extended beyond the alleged affair to encompass broader criticisms of Trump.
• Timing: The timing of the agreement, just before the 2016 election, fueled suspicions about its use to influence voters.

While a California court ultimately deemed the NDA invalid for other reasons (improperly identified parties), the case highlighted the potential pitfalls of unbalanced confidentiality agreements.

Balancing Interests

Crafting a valid NDA requires a delicate balance between protecting legitimate secrets and safeguarding freedom of speech and access to information. Courts will consider the following factors:

• The nature of the confidential information: Is it truly valuable and worthy of protection?
• The scope of the NDA: Does it go beyond reasonable limitations on disclosure?
• The fairness of the agreement: Are both parties treated equally, with reasonable opportunities to negotiate?
• The broader public interest: Does the NDA restrict information essential to public discourse or accountability?

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NDAs can be valuable tools, but their power comes with responsibility. Understanding the limitations on enforcing such agreements is crucial to ensure they don\’t become instruments of undue pressure or silence legitimate voices. As the Trump-Daniels case demonstrates, courts are increasingly scrutinizing NDAs that appear one-sided or attempt to shield matters of public concern. Finding the right balance between confidentiality and transparency is key to upholding both individual rights and societal interests.

Disclaimer: This blog is for informational purposes only and is not intended as legal advice. If you have questions about an NDA, please consult with an attorney.