Day 6·Q&A

NDAs aimed to protect trade secrets. Now they're often hiding bad behaviour, says prof

Julie Macfarlane, a professor emerita at the University of Windsor, says non-disclosure agreements went from a tool to protect intellectual property to a way of protecting bad behaviour in the workplace.

Julie Macfarlane wants to prevent the federal government from using NDAs in misconduct cases

Woman with short hair smiles in front of a brown brick wall in a black top.
Julie Macfarlane, a professor emerita at the University of Windsor, says non-disclosure agreements went from a tool to protect intellectual property to a way of protecting bad behaviour in the workplace. (Braunte Petric)

Non-disclosure agreements (NDAs), which can prevent a signee from discussing certain matters publically in perpetuity, have made headlines and come under scrutiny in recent years for playing a role in silencing victims in both the public and private sectors.

"I can't even begin to explain in words the trauma that results from these contracts," Julie Macfarlane, a law professor emerita at the University of Windsor, told Day 6 guest host Manjula Selvarajah.

In one recent example, Hockey Canada's use of NDAs in settlements with victims of sexual assault led to the sport body losing it's federal funding last year. That funding has since been restored.

Macfarlane is part of an advocacy campaign, called Can't Buy My Silence, that seeks to make NDAs unenforceable. She also helped draft a Senate bill, tabled earlier this month, that aims to prevent the federal government from using NDAs to cover up misconduct in the civil service.

"Every kind of bad behaviour in the workplace is now being treated as if it were a patented trade secret," she said.

Here's part of Macfarlane's conversation with Selvarajah. They discuss the origins of NDAs, how they can be used to shelter wrongdoing and harassment, and why women — particularly Black women — are more likely to have signed one.

Non-disclosure agreements were originally a mechanism for protecting trade secrets. What's the issue with how they're currently being used in Canada?

They were originally developed in the 1980s, actually, and in Silicon Valley. So, that probably gives you an idea of the original purpose of nondisclosure agreements, which was to protect all this very commercially sensitive information that was being developed around technology.

As time has gone on, we've seen them increasingly used for not just intellectual property or commercially sensitive information, but now they are being added pretty much as a matter of default in settlement agreements for all kinds of civil disputes. The most attention is being paid to disputes that relate to some kind of sexual misconduct, harassment, discrimination cases.

WATCH | Criticism after feds restore Hockey Canada funding without action on NDAs:

Critics call out feds for restoring Hockey Canada funding without action on NDAs

5 months ago
Duration 2:45
Critics are calling out the federal government for not making banning non-disclosure agreements (NDAs) a condition for resuming funding for Hockey Canada. They say NDAs can be used to silence sexual assault victims, and cover up misconduct.

Can you give us a sense of the scope of the problem?

We have gathered, and so have some others, quite a bit of data by allowing people to respond to surveys anonymously. There are now three studies in the United States that estimate that one in three workers has signed an NDA.

The areas in which we are seeing the most prevalent use of non-disclosure agreements to cover up misconduct … is in low-income, low-security, high-turnover sectors such as hospitality, accommodations and retail — where people are working for very little money. 

Is it true that women and racialized people are more likely to be asked to sign an NDA?

According to our data, yes. This does make a certain amount of logical sense because NDAs are nurtured [in an] environment of inequality and difference in power is very much an ingredient of leading to the issue of somebody being told they must be silent.

We also know that if you are a Black woman as opposed to a white woman, you are three times as likely to have signed an NDA.

What happens if someone refuses to sign an NDA?

We have been supporting and encouraging people who are finding themselves pressured to sign a non-disclosure agreement.

Let me just say that almost everybody that we hear from did not fully understand the consequences of that NDA when they signed it. It was just one clause in many, many pieces of paper. But if people do look and find they're being told they have to keep this matter secret forever from everybody, which is the standard blanket NDA, then we are encouraging them to push back.

[Those people] who want this kept out of the public want to hide the fact that this happened. This person behaved like this, and characteristically, unfortunately, will have behaved like this for many years before the organization actually did anything about it.

WATCH | Journalist Jodi Kantor on why she questions the use of NDAs:

Dark side of NDAs

4 years ago
Duration 1:11
New York Times journalist Jodi Kantor tells CBC's Adrienne Arsenault why she questions the use of non-disclosure agreements.

What are the legal consequences if someone breaks that NDA?

Technically they're in breach of a contract and therefore they can be sued and may be liable to repay the compensation which they have been given.

Now, in the United States, there is beginning to be some case law in which judges are striking down non-disclosure agreements. The ones that we will hear about are Donald Trump's, but there are actually quite a few other cases in which judges are saying correctly, "I think that they are an overreach. They are too broad, too vague, too unreasonable, and that people don't fully understand just what it is that they're committing to."

It is also very, very difficult in practical terms … to challenge them, which is why [the Can't Buy My Silence campaign] is focusing on legislation to change the law.

This bill that's currently before the Senate. How will that change the way that NDAs work?

I think it's important that the Government of Canada stops using non-disclosure agreements to cover up misconduct in the civil service. We do know that they use them and it's also important that they set standards for organizations that are federally funded in some way, like Hockey Canada.

The bill would prevent the government from using non-disclosure agreements to cover up complaints of misconduct within the federal civil service. 

[Another] piece, which I think is also terrifically important for people who've already signed non-disclosure agreements with the federal government or with a federally funded organization, is that there will be no use of federal funds any longer to pursue or to litigate a breach of an NDA.

Radio segment produced by Mickie Edwards. Q&A edited for length and clarity