Rise of NDAs has worrisome impact on worker rights and workplace equity

Remember when non-disclosure agreements were for tech companies looking to keep their algorithms under wraps and celebrities guarding their privacy?
The nonprofit Lift Our Voices (LOV) is putting a spotlight on just how common the pacts have become — and how inequitable they can be.
The group has launched what it calls a first-of-its-kind tracker, the LOV Where You Work Index, which reports the use of NDAs and forced arbitration clauses across thousands of companies. The goal: to help the workforce understand exactly what they’re signing up for when they join a company.
The index comes on the heels of studies from LOV and Penn State University — based on surveys of some 2,000 employees, job seekers and employment law attorneys — revealing the disproportionate effects of NDAs and forced arbitration clauses on historically marginalized groups, potentially creating unintended consequences for workplace equity and employee relations.
“There are countless indexes out there that rate companies as best places to work,” said Gretchen Carlson, the former Fox News host and co-founder of LOV. “But if employees are silenced through mechanisms such as NDAs and forced arbitration clauses, it is often impossible for them to assess their workplaces honestly.”
The index comes as nearly half of U.S. workers are bound by NDAs, with an even greater share of black and Asian employees subject to them, according to LOV. Women are also more likely to be forced into highly restrictive agreements.
Tamanna Ramesh — director of global innovation programs at The Coca-Cola Co. and founder of Spark Careers, which helps women and minorities navigate workplace inequity — observes that NDAs have drifted from their original purpose. “What started as a tool to protect trade secrets has morphed into a default mechanism for controlling workplace narratives and managing risk,” she said.
The implications for workplace culture are real. “From my experience at Spark Careers, NDAs can create a climate of fear and silence, where employees hesitate to report grievances or unethical behaviors” Ramesh said. “This undermines trust, damages employee-employer relationships and fosters a culture where accountability is deprioritized.”
Meanwhile, forced arbitration agreements, which are often bundled with NDAs, may not be the employee-friendly solution they’re made out to be. LOV’s data reveals that employees win 36% more often by going to court versus in an arbitration.
“Arbitration sounds neutral, but let’s be honest — it usually tilts the playing field in favor of employers,” said Tetiana Byrda, chief administrative officer at Sydnicode, a software company. “Cases are handled behind closed doors, payouts are lower and workers often feel the system isn’t built for them.”
Not all NDAs are created equal. Los Angeles labor attorney David Wimmer points out that some serve legitimate purposes. “When we’re talking about protecting real trade secrets — things like computer code, manufacturing processes or secret formulas — these agreements play an important role,” he said.
Meanwhile, their impact on talent acquisition and retention can be significant. “The widespread use of NDAs can backfire, particularly as employees prioritize workplaces that value transparency and fairness,” Ramesh said. “While companies may view NDAs as protective, they risk alienating top talent by fostering a culture of secrecy and mistrust.”
Ultimately, who wins and who loses with NDAs? For Ramesh, the answer is clear: “Employers aiming to avoid reputational damage and control legal risks benefit in the short term. But employees, particularly women and minorities, lose the ability to advocate for change or share their experiences. This dynamic often perpetuates systemic inequities.”
The NDA landscape is changing due to recent legislation like the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act and the Speak Out Act. But in a survey of HR practitioners last year, LOV found there was little awareness about those protections.
As they struggle to attract and retain talent in a competitive market, employers might want to rethink their reliance on confidentiality pacts. “A culture of secrecy can backfire,” Byrda said. “We’ve seen companies lose great candidates simply because their NDAs seemed overly restrictive. People want to work where they feel valued and heard.”