Can You Blow the Whistle if You Signed Confidentiality Agreements?

Learn What You Need to Know About Serving as a Federal Whistleblower if You Have a Non-Disclosure Agreement (NDA)

If you signed a non-disclosure agreement (NDA) and are thinking about blowing the whistle, it will be important to ensure that you have an accurate understanding of what your confidential disclosure agreement means (and doesn’t mean) regarding your ability to serve as a federal whistleblower. Though it creates confidential relationship between two parties, companies and federal agencies cannot use NDAs to prevent their employees from reporting trade secrets, fraud, waste, abuse, public safety and health threats, or violations of federal law.

However, some situations are complicated; and, even if your employer (or former employer) cannot legally enforce your NDA, it might attempt to do so anyway. As a result, careful planning and forethought are required, and you should ensure that you are making informed decisions by working with an experienced federal whistleblower lawyer.

NDAs, Whistleblowing, and Public Policy: What You Need to Know

To understand the implications (or lack thereof) of being subject to an NDA as a prospective whistleblower, we need to talk about public policy. While employers (including federal agencies) can enter into NDAs with their employees generally, they generally cannot use NDAs to prevent their employees from reporting confidential information, especially unlawful conduct.

This is because the federal government broadly has a public policy against prohibiting employees from exercising their legal rights (or punishing them for doing so). Of course, there are exceptions—which is why employers can require their employees to sign NDAs generally—but public policy strongly favors employees’ rights, freedoms, and protections. The federal government also has a strong public policy in favor of the efficient administration of justice, and this also weighs against allowing employers to force their employees for a legal protection in covering up their misdeeds.

Whistleblowers in the Private Sector

As a result, in most cases, employees in the private sector can serve as federal whistleblowers even if they have signed NDAs. Provisions in NDAs that restrict the disclosure of confidential and proprietary information, illegal activities or other acts that trigger federal whistleblower protections will typically be deemed unenforceable. Thus, even if an NDA purports to prohibit whistleblowing—either directly or indirectly—it generally won’t prohibit the subject employee from blowing the whistle.

Beyond public policy considerations, specific protections also apply in some cases. For example, the U.S. Securities and Exchange Commission (SEC) has adopted a regulation (17 C.F.R. Section 240.21F) that states:

“No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement (other than agreements dealing with information covered by § 240.21F-4(b)(4)(i) and § 240.21F-4(b)(4)(ii) of this chapter related to the legal representation of a client) with respect to such communications.”

With all of that said, if an employee who is subject to an NDA blows the whistle—and if his or her employer finds out despite the confidentiality protections afforded to whistleblowers under federal law—litigation and retaliation are both very real possibilities. This is why, as we said above, careful planning and forethought are critical. You should not let the threat of litigation or retaliation deter you from coming forward. But, you should make sure you are doing everything necessary to protect yourself and the business relationship to the fullest extent possible.

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Whistleblowers in the Federal Government

In the federal sector, the primary statute governing whistleblower complaints is the Whistleblower Protection Act (WPA). The WPA protects the disclosing party who come forward (in the manner required by the statute) to disclose fraud, waste, abuse, public safety and health threats, and violations of federal law.

The protections afforded to federal employees are supplemented by those contained in the Whistleblower Protection Enhancement Act (WPEA). Under the Whistleblower Protection Enhancement Act, federal agencies can only enforce non-disclosure agreements against federal employees if they contain the following statement:

“These provisions are consistent with and do not supersede, conflict with, or otherwise alter the employee obligations, rights, or liabilities created by existing statute or Executive order relating to (1) classified information, (2) communications to Congress, (3) the reporting to an Inspector General or the Office of Special Counsel of a violation of any law, rule, or regulation, or mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, or (4) any other whistleblower protection. The definitions, requirements, obligations, rights, sanctions, and liabilities created by controlling Executive orders and statutory provisions are incorporated into this agreement and are controlling.”

It is important to note that the same restriction applies to federal agencies’ non-disclosure policies generally, even if an employee has not signed a non-disclosure agreement. Thus, as a general rule, non-disclosure agreements (and non-disclosure policies) do not prevent federal employees from serving as whistleblowers under the WPA.

With that said, it is important to clarify that the WPEA-mandated statement only protects federal employees who make disclosures that are protected under existing law (including the WPA) or other pertinent sources of federal authority. Thus, if a federal employee who has signed an NDA (or is subject to a non-disclosure policy) has information the disclosure of which would not qualify for whistleblower protection, then the NDA (or policy) would generally be enforceable. As a result, federal employees who are subject to an NDA or non-disclosure policy and who are thinking about blowing the whistle would be well-advised to consult with a federal whistleblower attorney who can help them understand which protections do (and don’t) apply.

What It Means to Blow the Whistle

For both federal employees and employees in the private sector, it is also critical to ensure that you have an accurate understanding of what it means to serve as a federal whistleblower. To receive the protections afforded to whistleblowers under federal law (including the protection against enforcement of NDAs that are against public policy), employees must comply with all pertinent requirements under the relevant federal whistleblower statute or regulations.

This means submitting enough non-public information that the federal government can initiate an investigation, and it means doing so through the proper channels. In many cases, it also means being the first to come forward and make it a public knowledge. It does not mean disclosing non-public information online or to the media. These types of disclosures can violate NDAs, as they do not technically constitute “whistleblowing” under federal law.

FAQs: Serving as a Federal Whistleblower When You Have an NDA

Further Information About Blowing the Whistle With NDA

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