Blackmail and the Wrongful Non-Disclosure Agreement

David Kwok
Vol. 25
April 2025
Page 1

Nondisclosure agreements, along with other post-employment restrictive covenants, have been rising in prevalence. The FTC’s recent actions and litigation surrounding noncompete agreements are likely to drive more attention toward NDAs. The scope of legally permissible NDAs remains unclear, though, due to the selective process by which they enter the legal system. By their nature, NDAs are shrouded in secrecy. Courts typically only encounter NDAs in civil litigation, in which parties allege breach and are willing to address the matter in open court. Such civil cases are unlikely to be representative of how parties generally act regarding NDAs. Courts compound the problem through understandably narrow decisions frequently based on “unruly” and unclear doctrines.

In this article, I examine confidentiality agreements through the lens of a parallel limitation: the crime of blackmail, in which some forms of contracting for silence constitute criminal coercion. Blackmail has spurred similar debates about the proper boundaries of contracting in the criminal context. Blackmail and the attendant criminal sanctions offer clearer expressive power: society can recognize the moral blameworthiness of such agreements for silence. A formal acknowledgement of the criminal-civil linkage could spur courts and legislatures to adopt a more manageable approach toward the challenges posed by nondisclosure agreements.

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