Are NDA&#39;s that include illegal activity legally binding? With the recent outpouring of sexual assault allegations, I've been hearing the phrase "Non-disclosure agreement," thrown around quite frequently. Suppose a woman is sexually assaulted at work, and is given an NDA to sign. Can the company legally require her not to disclose the conduct of an illegal activity? I remember reading that contracts cannot be legally binding if there is a requirement of criminal acts, am I wrong to assume this for NDA's?
The validity of the NDA is not an easy question, but a related one is more clear. A lawyer in the U.S. in most states is not permitted to threaten criminal or administrative action (e.g. reporting someone to immigration or tax officials), to gain advantage in a civil case. You can unilaterally bring criminal charges or take administrative action, but it is deemed to be unethical and against public policy to refrain from bringing criminal charges or taking administration action to gain civil advantages. An NDA of the type described arguably violated the same public policy and might be invalidated as a result. Put another way, there is a privilege to make certain reports to public officials without legal consequences and such an NDA might violate that privilege. Some of these privileges found in what are called "whistle blower" statutes specifically prohibit this kind of agreement as to some specific kinds of illegal conduct, but not others. There isn't a general rule. This said, it is not black and white. For example, a private NDA can't prevent someone from testifying under subpoena, but can prevent someone from voluntarily testifying in the absence of a legal compulsion to do so such as a subpoena. Suppose a woman is sexually assaulted at work, and is given an NDA to sign. Can the company legally require her not to disclose the conduct of an illegal activity? I can imagine this example coming out different ways in different jurisdictions. For example, some states have a legal duty (rarely enforced) that requires people to report felonies, and an NDA in this case would contradict that affirmative legal duty, while others do not. Another source of gray in the analysis is that there is a difference between not reporting a sexual assault that actually happened, and, as part of a larger settlement, executing an affidavit stating under penalty of perjury and under oath that a sexual assault didn't happen. The first is potentially an NDA that is void as a matter of public policy. The other, in principle, is a settlement that the person signing the affidavit can only enter into if it is true. There is nothing, in general, wrong, about requiring someone to confirm that certain representations are true as part of a business transaction or contract and allowing the contract to go forwards only if certain facts are true. The gray gets deeper, because whether a sexual assault happened or not is not always a subjectively black and white clear issue of pure fact. (It is subjective because an affidavit or affirmation is made to the best of the declarant or affiants' knowledge and belief, not as a matter of objective fact.) For example, someone may not have perfect memory of what happened, or there could be doubt over the question of whether the perpetrators acted recklessly (the Model Penal Code intent requirement for sexual assault) or merely with criminal negligence (which would not be sexual assault under the Model Penal Code). A statement made under oath about whether a sexual assault happened to the best of your knowledge, thus, might be a mixture of factual issues (A penetrated B at a certain date and time) and legal or not perfectly factually known ones (A acted with X intent regarding consent during that act). So, in a case where there was some room to argue either way about how to characterize what happened and about what actually did happen, there might be some room for a settling party to make a non-perjured statement consistent with the settlement and then to agree not to a true NDA, but instead to not make statements which, if the affidavit is true, would be false. In a plea bargain in a criminal case, one can plead "no contest" without agreeing that the crime factually happened, but that isn't really possibly in the context of an affidavit about what really happened, with an NDA limited to not disclosing the incident since it was already agreed as a matter of sworn fact that there is nothing to disclose that rises the level of a crime.
Such a clause must be presented before or at the same time the offer is made. The (somewhat new) law NH RSA 275:70 says Any employer who requires an employee who has not previously been employed by the employer to execute a noncompete agreement as a condition of employment shall provide a copy of such agreement to the potential employee prior to the employee's acceptance of an offer of employment. A noncompete agreement that has not been disclosed to an employee as required by this section shall not be enforceable against the employee, but all other provisions of any employment, confidentiality, nondisclosure, trade secret, intellectual property assignment, or any other type of employment agreement or provision shall remain in full force and effect The question is whether such an agreement would mean you can't set up shop on your own and take a bunch of customers with you (it seems that such clauses are enforceable), or does it mean you can't work in that trade (competing for new customers, or as an employee of a competitor) – such an interpretation would not be enforced, in the analysis of this article. The clause must be "drafted narrowly to protect only a company's legitimate business interests, like customer goodwill and confidential information". A specific case of this interpretation is Merrimack Valley Wood Products v. Near, 152 N.H. 192, which finds that the law does not look with favor upon contracts in restraint of trade or competition...Such contracts are to be narrowly construed. Nonetheless, restrictive covenants are valid and enforceable if the restraint is reasonable, given the particular circumstances of the case In assessing reasonableness, three tests must be passed (must be answered "no"): first, whether the restriction is greater than necessary to protect the legitimate interests of the employer; second, whether the restriction imposes an undue hardship upon the employee; and third, whether the restriction is injurious to the public interest. As an example of a reasonable restriction: When an employee is put in a position involving client contact, it is natural that some of the goodwill emanating from the client is directed to the employee rather than to the employer. The employer has a legitimate interest in preventing its employees from appropriating this goodwill to its detriment. But restricting a person from working with any customers of the company (not just the employees work-related contacts) is unenforceable, because the company had no legitimate interest in protecting its entire client base from its former employee, because he had no advantage over any other complete stranger, possessing no special hold on the goodwill of the majority of Technical Aid's customers. See also Brian's Fitness v. Woodward for reaffirmation ("valid only to the extent that it prevents an employee from appropriating assets that legitimately belong to the employer"), and additional citations. The question arises whether there is a distinction between the former employee approaching former customers, versus those same customers approaching the former employee. I have not located any case that directly addresses that, but Technical Aid v. Allen, 134 N.H. 1 says A restrictive covenant must unreasonably limit the public's right to choose before it will be found to be injurious to the public interest. I think it is likely that the courts would find it to be an unreasonable limit on the public's right to choose, if a customer were prevented from choosing a different company to provide the desired service simply because the customer happened to have previously had a business relationship with the former employee. This "right to choose" is asymmetrical – the public has a right to choose any service provider, an employee does not have an equivalent right to pursue (seek out, woo) a customer, in light of a restrictiveness covenant.
California Penal Code 647f states that being intoxicated in public is prohibited. When the police arrived, they were confronted with probable cause for an arrest. They (presumably) became aware of the matter because the doctor called the police, since she believe that you would drive drunk. (We can inquire into whether that was a reasonable belief, but it doesn't matter, what matters is that she had the belief and acted on it). Now the question is whether the doctor acting on the belief (making the call) was legal. A negative answer does not affect the legality of the arrest. There is also a law imposing on medical professionals a duty to report, which is fairly wordy, but does not seem to directly require reporting the fact that a person is publicly intoxicated. However, attending circumstances could have suggested one of the triggering causes for mandatory reporting (wounds, for example). Again, it does not matter (to a point) if, in the light of close scrutiny, the doctor's conclusions were mistaken. When doctors are required to report facts to the police, reasonable over-reporting is not penalized. There is also no law against calling 911 to report a potential DUI (the usual public-campaign focus is on those actually driving). So calling the police under the circumstances falls between "allowed" and "required". The HIPAA privacy rule could be relevant because that theoretically could block the doctor from making the call. (Note that the doctor, and not the patient, is bound by the confidentiality requirements). §160.203 allows exceptions to the confidentiality requirement if "necessary... For purposes of serving a compelling need related to public health, safety, or welfare", so an exception may have been granted. If this was done within the scope of a mandatory reporting law, it is legal to disclose PHI; under §164.512 it is allowed, "to prevent or lessen a serious and imminent threat to the health or safety of a person or the public". A confidentiality agreement would not increase your chances of being arrested. If the doctor's confidentiality statement were less restrictive than HIPAA, HIPAA prevails (the law trumps contract terms). If it is the same as HIPAA, it has no effect (and simply states what HIPAA says – the normal case). If the agreement were more restrictive, it is possible that the doctor calling the police would be a breach of contract, unless the call was required by law. You would have to see what in the agreement would have prohibited calling the police. But that would not affect the validity of the arrest. To re-phrase the matter: the arrest was because you were found to be intoxicated in public. The police were there and could judge your state (probable cause). They were there by permission of the property owner, so the arrest was not unlawful for lack of a warrant. That is as far as one can go in searching for an illegality to the arrest itself. One might go further and ask whether the doctor has committed an actionable wrong by calling the police with her suspicions. This could go either way: it really depends on the full set of details, regarding your condition. If the doctor suspected that your actions fell under one of the mandatory reporting categories, she had to report, and otherwise it is not prohibited under HIPAA. If a person is intoxicated and answers the question "Would you normally proceed to drive home in this state?" in the affirmative, then it is a reasonable inference that the person will do so. An answer "No, absolutely not", on the other hand would work against the "public danger" inference: that has no effect on the arrest, but could have an effect in a suit against the doctor (violation of the privacy rule). In such a suit, the doctor's defense would presumably be that despite the answer, she still had a reasonable belief that you were a public danger. Then the matter would reduce to what other facts she knew of that would support a public danger conclusion.
In all likelihood, the judge's order related to data collection and reselling is not legally enforceable. They weren't parties to the expungement action, so the judge doesn't have jurisdiction over them. And, the First Amendment protects the right to say truthful things pretty absolutely. Arguably, if the sites provided the information without making clear that it might not be current because records were expunged or corrected, there might be a claim for negligent misrepresentation, false light, or even defamation, but I seriously doubt that even those claims would hold up. The language in the order might cause sites to comply out of not legally justified concern, or just a desire to be accurate, even if it is not enforceable. So, it doesn't hurt to bring that information to the attention of such sites and ask them to take down the information. But, when push comes to shove, I very much doubt that you would prevail in court enforcing that order against them. Certainly, if you do nothing, they will do nothing, because they are not psychic and have no idea that the court order related to those records has been entered. Even a valid and enforceable order directed at a party over whom a court has jurisdiction is not effective until the person ordered to comply with it has notice of the order. And, there is no system that gives sites like that notice without you taking action to inform them of an order.
Unless your employer agreed in a contract to not discuss your employment, then there is no legal restrictions on them discussing anything about your employment. If they say things that are untrue you could sue them for defamation.
First of all, this is not insider trading: insider trading is using non-public information to trade a publicly tradable security. What this could be is misuse of confidential information - a civil tort. The disclaimer does not create a legally binding contract for a number of reasons but it does alert the recipient that the information is confidential: if they use it then they can be sued for damages (probably successfully). However, given the nature of the information, it is almost impossible for your friend not to act on it and Company B should realise this. Legally he is doing the right thing, consulting a lawyer and informing Company B of its colossally massive stuff up. Ethically he may need to withdraw from the negotiations.
IANAL, and as @GeorgeBailey suggests, you should ask one. That said, some aspects of your question are directly addressable with what we know. Does US law states anything about this? Yes. Federally this falls under the Wiretap Act, 18 U.S.C. §2511. Workplace monitoring generally falls under either the "System Administrator Exception" or under Consent. In general, continuing past a banner constitutes consent. Does company policy enforcement with such a warning over ride the right to not be subject to surveillance? In general, yes. You don't need to use the companies network if you don't want to consent - and they don't need to hire you if you don't want to use their network. But it's their network, and their rules apply. There are some nuances, and courts have found that the wording of the notice has made a difference in some cases, but overall, if the systems are properly posted with banners, then the employer may capture communications. See the "Bannering and Consent" section of this article from cybertelecom.org, e.g.: Even if no clicking is required, a user who sees the banner before logging on to the network has received notice of the monitoring. By using the network in light of the notice, the user impliedly consents to monitoring pursuant to 18 U.S.C. § 2511(2)(c)-(d). Note that stored data is covered by different laws than communications. It's a nuance. Is it ethical to sniff all the data without giving any other warning than the logon banner? "Ethical" is a very different question than "Legal", and largely more subjective. Most employers require signed consent for monitoring as a condition of employment, and use banners thereafter. That is ethical by my definition, in that it meets or exceeds the requirements of the law, and does not mislead or use subterfuge. The tone of your question suggests you find it distasteful, and therefore probably it violates your personal code of ethics.
If I have correctly untangled the law, Schedule 2 of the Data Protection Act part 3 identifies as a condition where you are not prohibited from revealing personal data: The processing is necessary for compliance with any legal obligation to which the data controller is subject, other than an obligation imposed by contract. The Animal Welfare Act 25(1) says An inspector may require the holder of a licence to produce for inspection any records which he is required to keep by a condition of the licence I can't tell if you are required to keep customer names, but if you are, it looks like the pieces fit together and you would have to provide the records. Call a solicitor to be sure, though.