NDA boom is bad for employers and workers

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Employment dynamics

when. . .when #Me too A few years ago, the movement triggered a series of allegations of sexual misconduct against powerful men. It drew attention to how Confidentiality agreement It can silence people and allow illegal behavior to continue.Legislators in Ireland and California Draft law This will prevent non-disclosure agreements from being used to cover up harassment and discrimination. Many technology companies have promised to stop using them. Take Uber as an example, Say In the future, “survivors will control whether to share their stories.”

But more and more studies have shown that the problems of confidentiality agreements extend far beyond their use in sexual harassment cases. These agreements, which were originally used to protect trade secrets, have become commonplace in the United States, often appearing in the boilerplate language in settlement agreements, severance pay, and employment contracts.A sort of Paper A recent report published by Natarajan Balasubramanian, Evan Starr, and Shotaro Yamaguchi indicated that approximately 57% of American workers are covered by NDA, from 44% of accommodation and food services to 69% of professional services.Technology companies often let visitors front desk.

Orly Lobel, a law professor at the University of San Diego, said non-disclosure agreements are increasingly tied to non-derogatory clauses that prohibit employees from making any negative comments about their employers.she give An example in the employment contract of a major company in the United States, which states: “You shall not directly or indirectly discredit the company at any time, including making or publishing any written, verbal, electronic or digital, true or other declarations. The statement may have an adverse effect on the company‚Äôs business, public image, reputation or goodwill, including its operations, employees, directors and its past, present or future products or services.”

Lobel said the result was “a wider chilling effect on speeches and silence on a wide range of topics.” Although academic research has so far been mainly concentrated in the United States, Jonathan Chamberlain, an employment lawyer for Gowling WLG in London, said similar terms have been used in the United Kingdom and elsewhere.

Why should you worry? One might argue that employers and employees should be free to sign contracts that benefit both parties. For example, in the case of a settlement agreement, employees use their right to freedom of speech in exchange for money. However, when there is a clear power imbalance, this situation is more difficult to establish, especially when these terms are entirely a condition of employment.

Some silent clauses are so extensive that they are practically impossible to enforce. For example, in the United States and the United Kingdom, non-disclosure agreements cannot prevent employees from reporting any illegal behavior. Chamberlain said that very broad non-derogatory clauses “are not meant to be enforced. I have never seen them enforced. They are always difficult to enforce because the issue of freedom of speech is really tricky. They are here to threaten.”

But the threat can work. They can prevent important information from entering the public domain, from abusing employees to deceiving customers.Some former employees of the fraudulent blood test company Theranos were afraid Legal ConsequencesThey are not helpful to regulators, potential investors, potential employees, or good employers who want to distinguish themselves from bad employers.

Aaron Sojourner, associate professor of economics at the University of Minnesota, believes that stifling information will reduce the efficiency of the labor market. “It imposes this conversion cost: the devil you know is better than the devil you don’t know.”

a new one work documents Authors: Sojourner, Jason Sockin, and Evan Starr use data from Glassdoor, a site that allows people to make anonymous comments about employers. This shows that after the three states of the United States narrowed down the types of information that can be suppressed by the NDA, the traffic of negative information in Glassdoor reviews has increased.A sort of Research in the past Show that this is particularly useful for job seekers: when a review contains more negative information, they classify the review as more helpful.

No employer wants dissatisfied former employees to speak ill of them unfairly. But using these agreements to weave a web of silence is overkill, especially when the employer already has the right to sue for defamation.

Policy makers and some companies correctly recognize that silent clauses have problems with sexual harassment and discrimination. But this will be a missed opportunity to solve this problem to attract special attention and keep employees from talking about everything else.

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