Can Nondisclosure Agreements Violate the First Amendment? NDAs and Free Speech Explained

The formula for Coca-Cola. KFC’s 11 herbs and spices. The actual job of that neighbor who will say only that he works for the government.

In a world where the internet makes more information than ever more easily accessible, some things are still secrets. How? One reason is nondisclosure agreements.

This article defines nondisclosure agreements, explains how they relate to the First Amendment’s protection of free speech, and gives examples of when they are or are not OK limits on speech.

What is a nondisclosure agreement?

A nondisclosure agreement is a legal contract between two parties not to reveal certain information to anyone not authorized to have it.

It’s essentially a promise to waive the right to speak about specific information.

NDAs usually specify a period for which they are valid and identify penalties for breaking the contract. Generally courts don't like to step into private contracts, and the First Amendment does not apply to them.

NDAs that involve the government are a different story. The government itself cannot typically require NDAs because the government stopping speech before it happens, known as prior restraint, is generally not permitted under the First Amendment. If the government seeks to impose an NDA on an employee, it must protect speech as much as possible, including by stating as short a period as possible.

Who creates and uses nondisclosure agreements?

The most common use of NDAs is in private business. Corporate NDAs between companies and their employers, partners, clients and vendors are often designed to protect trade secrets, information that if shared could damage a company’s bottom line and boost competitors. They are often a condition of employment.

NDAs are also often used in lawsuit settlements or other dispute resolutions when parties agree to resolve a conflict between them. Such agreements usually prohibit the parties from revealing the nature of the dispute and the terms of the settlement.

In journalism, NDAs may be used to promise anonymity to sources who may come to harm by revealing what they know to the media.

In limited circumstances involving national security or classified information, the government requires agreements like NDAs. These agreements must align with the First Amendment, unlike private contracts.

Reasons for NDAs include protecting financial information like trade secrets, maintaining privacy, enabling two parties to have open conversations without fear that what they say to each other will be shared with others, or sometimes to cover up wrongdoing or criticism that could harm a person or company’s reputation.

Do nondisclosure agreements violate the First Amendment?

No, in general, nondisclosure agreements between private parties do not violate the First Amendment because they are agreements between two parties and/or are limited to protecting information that is likely to cause harm if disclosed.

The First Amendment prevents only the government from limiting speech. It does not prevent private people and companies from agreeing to limits on speech by other private people or companies.

The government itself cannot generally require NDAs because the government stopping speech is generally not permitted. Government-mandated NDAs will generally only be permitted when they are narrowly drafted to only prohibit disclosure of extremely sensitive national security and classified information and, even then, only for as long as necessary before the danger of disclosing that information goes away. They must protect as much speech as possible.

Restrictions on nondisclosure agreements

Government NDAs must align with the First Amendment

Because the government has to abide by the First Amendment, it can only limit speech in very specific and limited circumstances and can only limit speech before it happens in the most extreme circumstances.

Freedom of information laws that require disclosure of most government information do have some exceptions to protect people’s personal information, national security and private deliberation. Likewise, the White House enjoys executive privilege to keep some internal information confidential from other branches of government.

Government employees who have access to critical national security and classified information must agree as a condition of employment with the government not to disclose the classified information to anyone not authorized to receive it.

But while the government can restrict some job-related speech of its employees, it cannot prevent them from talking publicly about issues of public concern.

Private NDAs do not need to align with the First Amendment

Nondisclosure agreements are usually limits on speech imposed by private parties, so they do not need to align with the First Amendment’s protection of free speech. But that does not mean that they are always valid or enforceable. Sometimes the government may limit how NDAs can be used, though these are not based in the First Amendment but other protections under law.

Contracts cannot stop you from talking to the government when required. For example, if you are called to testify in court about something related to an NDA you have signed, you may testify despite the NDA.

Whistleblowers who alert authorities to specific kinds of wrongdoing or public harm enjoy legal protections that can overcome some nondisclosure agreements.

Some states prohibit NDAs in sexual assault claim settlements and a 2022 federal law limits NDAs in some sexual harassment cases. Several such laws were implemented following revelations of NDAs keeping sexual harassment and assault secret and leading to more people being victimized.

Example of an NDA that could not limit speech

In 2007, a court ruled against a software company that sued a financial publication for defamation and violating an NDA. Compuware and Moody’s entered into an agreement that Compuware would share its financial information with Moody’s in exchange for being featured in Moody’s financial publication. But Compuware didn’t like what Moody’s published about Compuware’s finances. A court said that the contract revolved around First Amendment free speech issues and so it would apply the high “actual malice” standard in deciding whether to enforce the contract. It ruled that Compuware’s desire to protect its reputation didn’t surpass Moody’s right to publish, despite the contract.

Ways nondisclosure agreements can limit speech

In 1977, former CIA analyst Frank Snepp published a book discussing his work and the CIA’s activities in Vietnam. He did not submit the book for CIA review before it was published, violating his employment agreement with the CIA. The government sued him for breaching the agreement not to reveal sensitive information. Snepp argued the agreement violated his First Amendment rights. The U.S. Supreme Court in Snepp v. United States (1980) said that many government employees would have a right to publish books about their work without government approval in advance. But it ruled that the government could limit publishing the kind of sensitive information that Snepp did because publishing the information was a national security risk.

A decade later, in Cohen v. Cowles Media Co. (1991), the Supreme Court heard the case of Dan Cohen. Cohen worked on a Minnesota campaign for governor. He provided information about the race to two newspapers in exchange for the reporters agreeing to protect his anonymity by not publishing his name. The newspapers later decided it was more important for the public to know his name than for them to honor their promise, which was legally considered a contract due to evidence of an offer, acceptance and consideration. They published his name, and he lost his job. The Minnesota Supreme Court ruled that enforcing the agreement would violate the newspapers’ First Amendment rights. In a 5-4 ruling, the U.S. Supreme Court said that the First Amendment did apply but ruled that, in this case, the First Amendment argument did not overcome the nondisclosure agreement.

In these two cases, nondisclosure agreements were upheld.

This report is compiled from previously published Freedom Forum content and with the input of Freedom Forum experts, including First Amendment expert Kevin Goldberg. The editor is Karen Hansen. Email.