Though substantial legal protections exist for employees who report misconduct they notice while on the job, companies still seek ways to keep conscientious individuals quiet. One potentially illegal tactic that has raised concerns among government regulators is the use of overbroad nondisclosure agreements to prevent employees from discussing workplace matters with outside authorities.  

The Consumer Financial Protection Bureau (CFPB) has issued a stark warning to employers: many nondisclosure agreements (NDAs) and confidentiality agreements might violate the law. The CFPB contends that broad, restrictive agreements might hinder investigations and run afoul of federal whistleblower protections.

While NDAs and confidentiality agreements sometimes serve legitimate purposes in protecting trade secrets and sensitive information, the CFPB is concerned about their potential misuse. Sweeping language that bars employees from sharing information with outside parties, without explicitly permitting communication with law enforcement or government regulators, may create an intimidating atmosphere. This could discourage employees from reporting illegal or unethical behavior, allowing misconduct to fester.

If you’ve recognized a problem on the job that justifies contacting the police or another outside authority, you should not be deterred by the possibility that it is a breach of your employment terms. Speaking with an attorney who has experience representing whistleblowers can apply the relevant law to the facts of your case and assert your rights if your employer tries to retaliate against you. 

To remain in compliance with the law, companies that use NDAs and confidentiality agreements should consider the following steps:

• Conduct a thorough review of existing NDAs and confidentiality agreements — Identify any language that could potentially deter whistleblowing and revise it accordingly.

• Draft clear and specific provisions — Clearly define the scope of confidential information and the types of disclosures that are permissible, including communication with law enforcement.

• Provide employee training — Educate employees about their rights and responsibilities under whistleblower protection laws, as well as the company's policies regarding confidentiality.

• Establish a robust internal reporting system — Encourage employees to report concerns internally, without fear of retaliation.

As demonstrated by the CFPB's warning, the legal landscape relating to whistleblower protection is constantly evolving. Employees must stay informed and recognize that their employer might not be in compliance with applicable regulations. When you’re unsure about the interplay between disclosure restrictions and your right to report workplace impropriety, Kardell Law Group can answer your questions and advocate for you if your employer has crossed the line.