Are Trump’s NDAs legal?

Donald Trump is not the first executive to use nondisclosure agreements to prevent federal employees from reporting abuses of authority or violations of law. Nondisclosure agreements, often referred to simply as NDAs, are very effective at covering up wrongdoing, even if they are illegal or unenforceable. The overwhelming majority of employees will not challenge restrictive gag orders for fear of being sued or losing their job. Payments of money for silence undermine law enforcement and erode democracy.

Congress has been well aware of the deleterious effect nondisclosure requirements have on the ability of federal workers to report misconduct for over 100 years. At the turn of the century, Presidents Theodore Roosevelt and William Taft were so upset with federal employees leaking information to Congress that they tried to implement gag orders restricting such disclosures. These gag orders triggered America’s first law protecting federal employee whistleblowers, the Lloyd-La Follette Act. Enacted in 1912 the law attempted to override nondisclosure rules that prohibited communications with Congress. Today the law remains on the books and simply states: “The right of employees, individually or collectively, to petition Congress or a Member of Congress, or to furnish information to either House of Congress, or to a committee or Member thereof, may not be interfered with or denied.”

{mosads}But the Lloyd-La Follette Act did not require the president or his appointees to change the content of nondisclosure agreements or otherwise ensure that employees were aware of their right to communicate to Congress.

In the mid-1980’s, the Reagan administration tried to stop disclosures of embarrassing information by implementing a new type of nondisclosure agreement, known as SF-189. Employees were required to sign a NDA agreeing that they would not release classified information, a requirement that was not controversial. However, the new nondisclosure agreement went further, prohibiting the release of information that was potentially “classifiable.”  SF-189 triggered strong opposition among whistleblowers who feared that the vague term “classifiable” would be used to retaliate against them when they reported waste, fraud and abuse within their agencies. The major federal employee unions sued the government to enjoin the enforcement SF-189, challenging the restriction on releasing “classifiable” information because it created an unconstitutional “chilling effect” on speech protected under the First Amendment. Aggressive court challenges, and strong congressional opposition, resulted in the administration changing the language in SF-189 and dropping the “classifiable” restriction.

Although the controversies over SF-189 are all but forgotten, they triggered one long-lasting change. In 1989, Congress enacted a rider to the federal budget that prohibited the use of any taxpayer monies to “implement or enforce” restrictive nondisclosure agreements that did not carve out employee whistleblower rights. This whistleblower-rights budget rider has been included in nearly every annual budget enacted by Congress since 1989, and most recently was reaffirmed on Jan. 3, 2018 in the Consolidated Appropriations Act of 2018, Public Law 115-141, §§ 7443 and 744.  

The whistleblower-rights budget rider does not simply prohibit restrictive nondisclosure agreements. It requires that every NDA specifically inform anyone who signs the agreement that specific rights are not waived. Persons signing these agreements must be explicitly informed of their right to report crimes or misconduct to Congress, Inspectors General or the Department of Justice, among other federal law enforcement agencies. Congress used its power of the purse to restrict the executive from exercising control of employees though the use of nondisclosure agreements that may have a chilling effect on the willingness of employees to blow the whistle. 

What exactly does the whistleblower rider in the Consolidated Appropriations Act of 2018 (and the earlier versions of this rider) require? It is illegal for any person to use federal money to “implement or enforce any” “nondisclosure policy, form, or agreement” that does not explicitly inform federal employees of their right to report any “violation of any law, rule, or regulation, or mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety” to any member of Congress or an Inspector General. It also prohibits nondisclosure agreements from waiving any federal employee’s rights under a host of whistleblower laws.

The rider also covers employees who work within intelligence agencies or who have top secret security clearances. Nondisclosure agreements that prohibit the release of classified information must “make it clear” that their NDAs do “not bar disclosures to Congress” or the “Department of Justice” if an employee is “reporting a substantial violation of law.” 

Because these restrictions on the use of federal monies to enforce restrictive nondisclosure agreements are contained in the massive federal budget law, as opposed to other sections of the United States Code, they are often overlooked by employees and their managers. But ignorance of the law is no excuse. Any person who has been asked to sign a nondisclosure agreement that is paid for, directly or indirectly, by the U.S. taxpayer, should ensure that the appropriate notifications are contained in the agreement. Furthermore, if the White House or any other branch of the federal government has asked or required any person to sign a nondisclosure agreement that does not contain the required whistleblower rights notifications, it is incumbent upon the Department of Justice or the appropriate Inspector General to fully investigate these violations of law. The Justice Department must ensure that employees and former employees are aware of their rights, and if any officials have violated this law, they must be held accountable for implementing illegal censorship policies.

The whistleblower-rights budget rider is not the only authority governing the legality of nondisclosure agreements. In the private sector the Secretary of Labor struck down NDAs that prohibited employees from reporting safety concerns to the government. The Securities and Exchange Commission has fined companies for NDAs that restrict the right of employees to report regulatory violations to state and federal law enforcement agencies and Congress, the Defend Trade Secrets Act, carved out an exception that prevents companies from improperly using a trade secrets privilege to prohibit employees from reporting crimes to law enforcement.  Moreover, the common law on the enforceability of contracts has historically been applied to nondisclosure agreements, and overly broad restrictions that prevent individuals from reporting crimes or safety violations to the government have been voided. But the federal whistleblower-rights budget rider goes one step further. It requires formal notification to all employees of their whistleblower rights within the text of any NDA. 

The whistleblower-rights budget rider was ingeniously drafted by Congress to reaffirm a cornerstone of democracy through a budgetary clarification. The White House and every executive agency may not spend one penny of the taxpayers’ money to improperly restrict whistleblowing. A most basic principle of democracy is affirmed: the right of the people to report violations of law and abuses of power to appropriate authorities cannot be abridged. 

Stephen M. Kohn is a whistleblower rights attorney and partner in the whistleblower rights law firm of Kohn, Kohn & Colapinto. He has successfully challenged nondisclosure agreements in both the federal government and private sector.