How New York is limiting NDA’s

On Behalf of | Sep 30, 2021 | Business Law |

Non-disclosure agreements, or NDAs, are contracts used to keep people from talking about the terms of a settlement. At other times, they’re used by employers to ensure confidentiality is honored. In recent years, this has become a serious issue in New York State. Partly, this is because former New York City mayor, Michael Bloomberg, used NDAs to keep so many of these to keep his employees from talking about their work and interactions with him. Later, it was revealed that he was an abusive boss.

Changes to NDAs

In order to be valid, contracts need to meet certain legal standards. One of these is that it has to show consideration for both parties. In 2018, the rules around NDAs changed. They could no longer be used to hide claims made by employees about misconduct, including sexual harassment.

This marked a big change in the way that NDAs were used. For years, they were viewed as standard in many workplaces. That was particularly true when people were working around very wealthy or prominent people. For example, NDAs were often used by celebrities for their staff. It wasn’t just politicians and entrepreneurs like Michael Bloomberg.

Over time, NDAs are evolving to become ever more narrow in terms of what disclosures they prevent. In 2019, the rules around NDA protections were expanded. Now, employees have up to 21 days to decide what they want. They can’t be rushed into signing an NDA and settling any longer.

They will have three weeks to decide if they want to go to court and make their claims public. Giving them the power to choose is a huge win and helps to level the playing field. Someday, NDAs may be left in the past entirely.