We’ve reached the end of our series on nondisclosure agreements (NDAs). If you’re an up-and-coming actor who just signed an NDA for a top-secret superhero flick or if you're simply curious about the world of nondisclosure agreements, you’ve come to the right place.
We've covered the basics and dissected the intricacies, and now we’ll wrap up the series with some interesting facts about NDAs and the risks they sometimes bring to the table.
Risks of having an NDA
Whether you’re a business owner or a pop star with a brand-new project to protect, drafting an NDA means you want people (your staff and practically everyone around you) to sign it. This implies you have a secret worth safeguarding. While NDAs have done wonders protecting Beyoncé’s top-secret projects and even managed to keep Coca-Cola’s secret syrup recipe under wraps, they can also give you a false sense of security.
In our previous blog, we mentioned that NDAs aren’t foolproof and that, in most cases, they’re more of a deterrent than an absolute safeguard. The truth is, if someone really wants to spill your secrets, a piece of paper might not be enough to stop them. In the age of social media, where spreading misinformation is as easy as clicking a button, gossipmongers will simply find a way to tiptoe around it.
Then there’s the issue of overreaching NDAs or those overly broad and aggressive agreements that end up backfiring, particularly in professional relationships. Instead of protecting your interests, they might just scare away potential collaborators or employees. Overly aggressive NDAs can make people doubt if you are of sound mind and question your business practices.
Real-life NDA fumbles
We repeat: NDAs are not always the ironclad shields they’re made out to be. Sometimes, they can backfire spectacularly, bringing more attention to the secrets they were meant to protect. Here are a few infamous cases where NDAs went terribly wrong:
Stormy Daniels and Donald Trump
Perhaps one of the most famous examples is the NDA signed by Stormy Daniels to keep quiet about her alleged affair with Donald Trump. The agreement became a massive public spectacle, with Daniels suing to invalidate it, claiming that Trump never actually signed it. The case brought more attention to the very issue the NDA was supposed to suppress.
Zelda Perkins and Harvey Weinstein
Zelda Perkins, a former assistant to Harvey Weinstein, broke her NDA to expose Weinstein's sexual misconduct. The NDA was part of a settlement that sought to silence her and another colleague, but Perkins eventually decided that speaking out was more important. Her brave decision highlighted how NDAs can be used to cover up serious wrongdoing, and it even sparked debates about the ethics of such agreements.
Silicon Valley secrets
Not all NDA disasters are about celebrities. Take the case of the startup Theranos in which employees were forced to sign draconian NDAs to keep the company’s dubious practices confidential. Despite these agreements, the truth about Theranos's fraudulent blood-testing technology eventually leaked, leading to the company's monumental collapse and criminal charges against its executives. In the end, the NDAs only served to delay the inevitable exposure of the company’s misdeeds.
Surprising facts about NDAs (or commonly known facts you didn’t know until now)
It’s no surprise that celebrities, both A-listers and D-listers, use and misuse NDAs. You’ve probably heard of celebs deploying some dubious NDAs, so our attempts to shock you with even more shocking NDA anecdotes might be futile. But we'll give it a shot with these lesser-known NDA-related facts:
The ultimate NDA myth: The Beyoncé NDA
You may have heard whispers about The Beyoncé NDA, touted as the only truly ironclad NDA in existence. Fans dream of a chance to sign this elusive document, thinking it would give them a glimpse into Beyoncé’s world. Sorry to burst your bubble, but there is no such thing as The Beyoncé NDA. Queen B and her management team are just exceptionally skilled at protecting her projects. This level of secrecy is why she and her team can create cultural events without a single leak.
The birth of the NDA
NDAs were originally designed to protect trade secrets, like Colonel Sanders' recipe of 11 herbs and spices, not to silence victims of harassment. NDAs have been around since the 1940s, first appearing in maritime law to keep sailors from revealing secret ship designs. Over time, these guardians of confidentiality have been misused, often to silence those speaking out against misconduct.
Clearing up the confusion between NDAs and NCAs
Many people confuse NDAs with non-compete agreements (NCAs). While an NDA keeps you from blabbing about secrets, an NCA stops you from working with competitors. Think of it this way: an NDA is like a lock on your diary, while an NCA is like a GPS tracker that ensures you stay far away from rival companies. Both are restrictive but in very different ways.
NDAs and confidentiality agreements are siblings in the legal family
Think of NDAs and confidentiality agreements as siblings in the legal family; they’re similar but not identical. An NDA is drafted to keep you from revealing secrets, while a confidentiality agreement is more laid-back. It's used broadly to cover a variety of situations where discretion is key. Confidentiality agreements are all about keeping information on the down-low without the dramatic flair of an NDA.
Read parts 1, 2, and 3 of our series about NDAs:
The ABCs of NDAs (Part 1): The basics, the bizarre, and the ironclad
The ABCs of NDAs (Part 2): Confidentiality in the business of relationships
The ABCs of NDAs (Part 3): The costly consequences of breaking an NDA
Secrets are a staple of every legal case, and when it comes to handling, protecting, and uncovering those secrets, we’re the legal eagles you want on your side. We’re here to help with all your Washington State family law needs, and we're pretty good with NDAs too. Visit our law offices in Kent, or leave us a message.