In a legal agreement, “no disclosures” means you’ve promised not to share specified information with anyone outside the agreement. The clause appears in standalone non-disclosure agreements, confidentiality sections of larger contracts, and settlement documents. Signing one binds you to keep the covered information to yourself, and breaking that promise can lead to injunctions, damages awards, and professional consequences. One important caveat sits on top of all of this: federal law makes certain no-disclosure provisions unenforceable no matter what the contract says, particularly when you’re reporting illegal conduct.
What the Clause Actually Restricts
A no-disclosures clause defines three things: what information is protected, who is bound, and how long the restriction lasts.
The protected information in a business context typically includes trade secrets, client lists, financial data, product development plans, or pricing strategies. Some agreements go broader and cover anything learned during the relationship that isn’t already public. The restriction reaches both deliberate sharing and indirect disclosures, including social media posts about deal terms, conference conversations about project details, or leaving documents where unauthorized people can see them.
Duration varies. Employment NDAs often run one to three years after the relationship ends, while trade secret obligations can last indefinitely as long as the information stays secret.
Courts pay close attention to how precisely the clause defines “confidential information.” In PepsiCo, Inc. v. Redmond, the Seventh Circuit examined a confidentiality agreement that prohibited disclosing information “relating to the business of PepsiCo … which shall not be generally known or available to the public.”1Justia. PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995) Vague language invites disputes over what’s actually protected. Precise clauses are easier to enforce and harder to violate by accident.
What a Breach Can Cost You
Breaking a no-disclosures clause triggers civil liability. The most immediate remedy is usually an injunction, a court order telling you to stop disclosing the information. The other party will also seek monetary damages for the financial harm the disclosure caused.
Calculating damages gets complicated. Courts have to value the confidential information and the harm from its exposure, often with expert testimony when trade secrets or proprietary technology are involved. In DuPont v. Kolon Industries, a jury found that Kolon willfully and maliciously misappropriated 149 DuPont trade secrets and awarded $919.9 million.2United States Court of Appeals for the Fourth Circuit. E.I. DuPont De Nemours and Company v. Kolon Industries, Inc. That’s an extreme figure, but it shows the ceiling. Where conduct is willful or malicious, courts may add punitive damages on top of actual losses.
The money isn’t the whole picture. A breach can end business relationships, especially in finance and healthcare where clients expect absolute confidentiality. Licensed professionals who violate confidentiality obligations can face discipline from their licensing board, up to suspension or loss of license.
Disclosures a Contract Cannot Prohibit
This is where many people, and many employers, go wrong. Several federal laws make specific no-disclosure provisions unenforceable, and no contract language can override them.
Reports to the Government About Illegal Conduct
The Defend Trade Secrets Act gives blanket immunity to anyone who discloses a trade secret to a government official or an attorney for the purpose of reporting or investigating a suspected legal violation. The disclosure has to be made in confidence, but once it is, no NDA or confidentiality agreement can create liability for it.3Office of the Law Revision Counsel. 18 USC 1833 – Exceptions to Prohibitions The same immunity applies to information disclosed in a court filing that’s made under seal.
Employers have an obligation that’s easy to overlook: every contract or agreement governing trade secrets or confidential information must include a notice informing the employee of this immunity. An employer that skips the notice loses the right to recover exemplary damages or attorney fees in any trade secret suit against that employee.3Office of the Law Revision Counsel. 18 USC 1833 – Exceptions to Prohibitions The notice can cross-reference a separate policy document instead of appearing in full in the agreement, but the policy document must actually be provided.
Communications With the SEC
Under SEC Rule 21F-17, no person or company may take any action to impede someone from communicating directly with the SEC about a possible securities law violation. The rule explicitly reaches enforcing or threatening to enforce a confidentiality agreement.4eCFR. 17 CFR 240.21F-17 – Staff Communications With Individuals Reporting Possible Securities Law Violations
The SEC enforces this actively. J.P. Morgan Securities paid $18 million in 2024 over language the SEC found violated whistleblower protections, and Activision Blizzard paid $35 million in 2023 for similar violations combined with disclosure control failures.5SEC. Whistleblower Protections If an NDA could reasonably be read as discouraging reports to the SEC, the company is exposed even if it never tries to enforce the clause.
Sexual Assault and Harassment Claims
Since 2022, the Speak Out Act has made pre-dispute non-disclosure agreements unenforceable when they cover sexual assault or sexual harassment claims.6Congress.gov. S.4524 – 117th Congress (2021-2022) Speak Out Act “Pre-dispute” is the operative word. An NDA signed before the conduct occurred cannot stop the person from speaking about it later. Agreements reached after the dispute, including settlement agreements, are not affected by this law.
Exceptions Typically Written Into the Clause
Even strict no-disclosure clauses usually carve out situations where secrecy is impractical or legally impossible. Most agreements include at least three:
- Legally compelled disclosure. If a court order, subpoena, or regulatory demand requires you to produce information, you can comply. Most clauses require you to notify the other side first so they can try to block or limit the disclosure.
- Disclosures to your own professional advisors. Sharing with your attorney, accountant, or financial advisor is typically permitted because they’re bound by their own confidentiality obligations.
- Information that becomes public through no fault of yours, or that you can prove you already knew or developed independently before signing.
These exceptions need to be in the written agreement to be reliable. Don’t assume an implied exception will protect you.
Defenses if You’re Accused of a Breach
An accusation isn’t a judgment. Several defenses come up regularly in these disputes:
- Public domain. If the information was already publicly available when you disclosed it, there was nothing confidential left to protect. You generally have to show it entered the public domain through legitimate means.
- Independent development. If you arrived at the information on your own without relying on what was shared under the agreement, the clause doesn’t reach that information.
- Prior knowledge. Information you already knew before signing is generally not covered, though proving the timeline is hard without documentation.
- Overbreadth. If the clause is so broad that it effectively prevents you from working in your field or using general professional skills, a court may refuse to enforce it or narrow it to something reasonable.
- Failure to treat the information as confidential. A company that shared the information freely internally, left it unprotected, or never marked it as confidential undermines its own claim that it deserved protection.
The strongest position stacks more than one of these together.
No-Disclosures in Employment Agreements
Most people first encounter a no-disclosures clause through an employment NDA. Employers in technology, pharmaceuticals, finance, and other data-intensive industries routinely require them as a condition of hire, usually to keep proprietary information out of competitors’ hands.
Courts review employment NDAs for reasonableness. A clause that tries to prevent an employee from ever using anything learned on the job is almost always unenforceable, because courts reject provisions that work as disguised non-competes. The clause has to target specific categories of information the employer actually treated as confidential, not professional knowledge and skill generally.
Duration and scope matter too. A two-year restriction tied to a specific product launch is far more enforceable than an indefinite one covering “all business information.” In PepsiCo v. Redmond, the court granted injunctive relief in part because the confidentiality agreement was tied to genuinely sensitive strategic information that a high-level executive had accessed.1Justia. PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995) The broader and vaguer the restriction, the more skeptical courts become.
Before you sign, check for the federally required whistleblower immunity notice. If it isn’t there, the employer has already weakened its own enforcement position, and asking for the notice to be added protects both sides.3Office of the Law Revision Counsel. 18 USC 1833 – Exceptions to Prohibitions