NDAs & Confidentiality Clauses in Employment
An employment NDA is normal — but a perpetual, overbroad one that bars protected reporting is a red flag. Know the limits the law already places on it.
Last reviewed: May 26, 2026 by the BizLeaseCheck Editorial Team
General information, not legal advice.
Overview
Almost every employment agreement includes a confidentiality clause or NDA protecting the company’s confidential information and trade secrets. A reasonable one is standard; an overbroad one can chill your ability to use your own general skills and to report wrongdoing.
Federal and state law place real limits on what an NDA can do, so a clause that ignores those limits is a sign the agreement was drafted aggressively.
Topics to check
A reasonable clause protects genuine confidential information and trade secrets — customer lists, pricing, source code, business plans — and excludes information that is public, that you already knew, or that you develop independently. Watch for definitions so broad they capture your general knowledge and skills, and for perpetual durations on information that is not a true trade secret.
Trade secrets can be protected indefinitely while they remain secret, but ordinary confidential information is usually protected for a defined period; an indefinite bar on everything is overbroad.
Trade secret (Cornell LII Wex)An NDA cannot lawfully prevent you from reporting illegal conduct to a government agency or participating in an investigation. The Defend Trade Secrets Act also provides immunity for confidentially disclosing a trade secret to the government or in a court filing to report a suspected violation of law, and requires employers to notify employees of that immunity in agreements governing trade secrets.
If a confidentiality clause appears to bar government reporting or omits the required immunity notice, treat it as a drafting red flag and a point to raise.
Defend Trade Secrets Act whistleblower immunity — 18 U.S.C. § 1833 (Cornell LII)Seek a carve-out for information that becomes public through no fault of yours, for your pre-existing knowledge, and for disclosures required by law. Confirm a sensible return-or-destroy obligation at termination, and make sure the clause does not silence you from discussing your own wages or working conditions, which separate labor law protects.
A confidentiality clause that respects these limits is normal and reasonable to sign.
Defend Trade Secrets Act — 18 U.S.C. § 1836 (Cornell LII)Key takeaways
- A reasonable confidentiality clause is standard; an overbroad, perpetual one is a red flag.
- "Confidential information" should exclude public info, your prior knowledge, and independently developed work.
- An NDA cannot bar you from reporting illegal conduct to a government agency.
- The DTSA gives whistleblower immunity for confidential disclosures to the government and requires notice of it.
- Confidentiality cannot silence you from discussing your own wages and working conditions.
Official resources
Legal-review notes
Guide confidence marker: Medium confidence.
- The scope of enforceable confidentiality and the treatment of trade secrets depend on the wording and state law; confirm with counsel.
- Whistleblower and wage-discussion protections come from several federal and state laws; specifics vary by situation.
Frequently asked questions
Is an employment NDA normal?
Yes. Most employers use a confidentiality clause or NDA to protect genuine confidential information and trade secrets, and a reasonable one is standard to sign. The concern is an overbroad or perpetual clause that captures your general knowledge or bars protected reporting.
Can an NDA stop me from reporting illegal activity?
No. An NDA cannot lawfully prevent you from reporting illegal conduct to a government agency or participating in an investigation, and the Defend Trade Secrets Act gives immunity for confidential whistleblower disclosures to the government. A clause that ignores this is a red flag.
How long should a confidentiality obligation last?
True trade secrets can be protected as long as they remain secret, but ordinary confidential information is usually protected for a defined period. An indefinite bar on all information, including your general skills, is overbroad and worth narrowing.