In The News: Non-Disclosure Agreements

Non-Disclosure Agreements (NDAs)

These have been much in the news for years now, because our president loves them so much and he has so much to hide. He makes everybody sign NDAs, not only prospective employees, but also family members, Playboy Playmates, and porn stars. The orange eminence is currently trying to block the publication of two books, and both authors are subject to his mania for NDAs. That would be John Bolton, and Mary Trump, Ph.D. (clinical psychology). You can use this handy guide when you read about them in the news.

NDAs are contracts. Like all contracts, they are not subject to review until someone tries to enforce one. In effect, you don't know if one is enforceable until the judge in the breach of contract lawsuit decides the issue. That's the threshold issue, which means that it will be argued first. If the court decides that the NDA is enforceable, the case goes forward; if it is unenforceable because the court upheld the Receiving Party's defense, the case is dismissed.

The following general information comes from acc dot com, the website of the Association of Corporate Counsel.

The parties to an NDA are referred to as the Disclosing Party (like the company doing the hiring, or our president), and the Receiving Party (the employee, or the porn star).

If a breach of contract lawsuit is filed, the defendant (the Receiving Party) may offer one or more of the following defenses:

1. The NDA has terms that are overly broad, vague, or ambiguous;
2. The NDA lacks consideration on one side. Consideration is the things that are exchanged in a contract; both parties must receive something of value that they want. The Receiving Party's consideration is the promise not to disclose the information being shared. The Disclosing Party's consideration may be the job, or a sum of money.
3. The information being disclosed is of no value;
4. The Disclosing Party failed to maintain the secrecy of the information that was disclosed;
5. Disclosure to third parties! This means that the Receiving Party shared the information with a third party, who then disclosed it. The third party is not a party to the original NDA, and therefore cannot be sued for the breach. A good deal of lawyer money could be spent arguing this issue;
6. Unequal bargaining power! Contracts are enforceable only if both parties agreed to the exchange of promises of their own free will. Where the Disclosing Party uses its inherent power imbalance to impose the NDA on an unwilling Receiving Party, the NDA may be unenforceable;
7. Some jurisdictions recognize the “Inevitable Disclosure Doctrine.” I haven't read any cases on this issue, but my guess is that it is just what it sounds like;
8. Issues relating to damages. Difficulty in quantifying damages; liquidated damages set too high in the NDA; etc.

I believe that in John Bolton's case the issues will revolve around national security, and the confidentiality of the office of National Security Adviser itself. I'm sure that an NDA of some kind was involved, but so far efforts to block the publication of Bolton's book haven't mentioned it that I know of.

Mary Trump, on the other hand, signed an NDA in 2001 as part of the settlement of a law suit over distributions in the will of Frederick Trump, Sr. The sun dot com. I haven't seen the NDA. I'm curious to know how many Receiving Parties there were, i.e. just Mary, or numerous family members. Same for Disclosing Parties.

Mary's book presents no issues of national security. It appears to be based on her own experience of life inside her own family. It's hard to imagine any court issuing an injunction against the initial publication of the book, a prior restraint in other words. That would leave our present president with only two options: sue post publication for breach of the NDA, if the information is true and covered by the NDA; or sue post publication for defamation, if the information is harmful and demonstrably not true (and was published with actual malice, because DJT is a public figure). To do that, after the book was on sale, would seem self-destructive and malicious, would it not? But Trump is nothing if not litigious, so I wouldn't put anything past him.

Today news post dot com says that the “NDA banned (Mary) from talking about their relationship.” It's not clear exactly what was covered.

Daily mail dot com says that the book details “events that she witnessed as a child” at her grandparents' home. That would be Fred Trump Sr's house in Jamaica, Queens, New York City.

Without having seen the NDA, predicting anything with certainty is difficult. A couple of potential issues do, however, jump out.

One is the terms of the agreement. Non-disclosure of the terms of the settlement would be fine, but non-disclosure of any information regarding familial relationships would almost certainly be overreaching and overly broad.

Another is unequal bargaining power. Either it was the four living Trump siblings v. the family of deceased Fred Trump Jr., or DJT v. Mary Trump, and either way those sides are clearly unequal. If Fred Trump Jr's widow and children were in any kind of a financial squeeze, a judge may find that they signed the NDA under undue influence.

Other Issues

I am concerned about the legality of an NDA that seeks to enforce non-disclosure of illegal acts. Contracts in general, including NDAs, must be entirely based in legal subject matter. Illegal subject matter would void an NDA. Imagine the Mafia forcing its soldiers to sign NDAs. Illegal subject matter would include any tax avoidance shenanigans that Mary may be aware of.

Also, an NDA in connection with the settlement of a specific law suit could not support a claim that any matters that had arisen before the lawsuit was filed were involved in the NDA. Any information that was known to Mary Trump before that law suit was filed, especially information involving the Trump family in other contexts, would be hers to disclose. They could not be rolled into the NDA.

We must always remember, and be grateful, that all of us now have whole libraries at our fingertips. On our various computers, or even our phones, we are able to look up all kinds of things, anywhere, anytime. What famous people died on my birthday? What was the typical aircraft compliment for a jeep carrier in 1944? What is a jeep carrier? What's the population of Denmark? How many Malaysian Ringgit are in one U.S. dollar? One thing is for sure, more people should be looking up more information. God knows, most people on Facebook should do a lot more fact checking before they shoot their mouths off.

The scope of the information available on the Internet is even wider than an ordinary library. It's like having access to multiple specialized libraries as well. Whole libraries devoted to medicine, art history, and, today's feature, law. I hardly know anybody who uses this wonderful power to its fullest advantage. I'm very grateful for it.