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NDA Enforceablity

TwiceHorn

By TwiceHorn
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TwiceHorn

TwiceHorn 31495

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There are all these NDAs out there, many having to do with you-know-who, that are outside the usual context of technical or business confidential information.  Some of them having to do with information with a good deal more public interest than the formula for Coke or the settlement of a patent lawsuit.

The business and technical non-disclosure or confidentiality agreements are routinely enforced, but, usually, no one is arguing that there is much or any public interest in knowing the contents and the confidential information.

Does anyone have any insight on how or whether these agreements are enforced in other contexts?

Thought about putting this in the lawdog thread, but figured a wider audience might have more insight.  Actually doing research seems like a pain in the ass to try to weed out the conventional NDA cases.

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F250

F250 28779

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2 hours ago, TwiceHorn said:

There are all these NDAs out there, many having to do with you-know-who, that are outside the usual context of technical or business confidential information.  Some of them having to do with information with a good deal more public interest than the formula for Coke or the settlement of a patent lawsuit.

Isn't this the kind of thing that people involved in Reality TV shows sign? The contestants on Survivor agree not reveal spoilers and stuff like that.

 

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TwiceHorn

TwiceHorn 31495

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5 hours ago, F250 said:

Isn't this the kind of thing that people involved in Reality TV shows sign? The contestants on Survivor agree not reveal spoilers and stuff like that.

 

I guess they're all over the place.  I have fairly extensive experience with technical ones, where they ground trade secret misappropriation suits and disputes.

But I know nothing about how they're enforced in connection with say, the Stormy Daniels thing.  Or Harvey Weinstein.  

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FondrenRoad

FondrenRoad 4378

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55 minutes ago, TwiceHorn said:

I guess they're all over the place.  I have fairly extensive experience with technical ones, where they ground trade secret misappropriation suits and disputes.

But I know nothing about how they're enforced in connection with say, the Stormy Daniels thing.  Or Harvey Weinstein.  

Aren't the Stormy type NDAs tied to payments?  I was under the impression that the damages for breach were returning the received hush money. 

More interesting to me are the ones that require crime witnesses or victims to stay silent. Maybe Weinstein's fall under this category. I would think they would be completely unenforcable.

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TwiceHorn

TwiceHorn 31495

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49 minutes ago, FondrenRoad said:

Aren't the Stormy type NDAs tied to payments?  I was under the impression that the damages for breach were returning the received hush money. 

More interesting to me are the ones that require crime witnesses or victims to stay silent. Maybe Weinstein's fall under this category. I would think they would be completely unenforcable.

That's what I am curious about.

In the trade secrets context, an NDA is more an item of evidence that shows you knew and agreed that certain information was confidential and not to be disclosed.  You don't really sue for breach of that kind of NDA.

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Shaddie

Shaddie 1651

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7 minutes ago, TwiceHorn said:

That's what I am curious about.

In the trade secrets context, an NDA is more an item of evidence that shows you knew and agreed that certain information was confidential and not to be disclosed.  You don't really sue for breach of that kind of NDA.

I have had to sign a few of the “tech” secret ones. Unless you have wrote the most revolutionary algorithm it’s all bluster to keep you from moving to a competitor and bringing customer list. I am not a lawyer so this advice is worth what you paid for.

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TwiceHorn

TwiceHorn 31495

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2 minutes ago, Shaddie said:

I have had to sign a few of the “tech” secret ones. Unless you have wrote the most revolutionary algorithm it’s all bluster to keep you from moving to a competitor and bringing customer list. I am not a lawyer so this advice is worth what you paid for.

A lot of the time, this is true.

But on occasion, real trade secrets are stolen.  The Chinese are big fans.

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RollLeft

RollLeft 5045

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You're the attorney damnit!  Just put it all in there and then you know better than us to slap this bad boy in there...

Enforceability Clause. In the event any portion of this Agreement is found to be invalid or unenforceable, the remainder shall remain in full force and effect.

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LABEVO

LABEVO 928

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This is very context dependent. I sign an NDA a week so it comes down to the information, setting, and potential situation. Are you going to a competitor or just normal business discussions...

not a lawyer but play one at work sometimes 

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troph

troph 24851

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Consideration and not a violation of public policy, seems then you have a deal. Mutual promises of confidentiality should be enough. Unilateral NDAs could be too - dependent upon other consideration - access to info, a job, money, etc.

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Jerry Callo

Jerry Callo 8704

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9 hours ago, troph said:

Consideration and not a violation of public policy, seems then you have a deal. Mutual promises of confidentiality should be enough. Unilateral NDAs could be too - dependent upon other consideration - access to info, a job, money, etc.

Sounds about right.  Can't be based upon an illusory promise, can't be illegal, or against public policy.  Couching extortion in the terms of an NDA probably not going to hold up.

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TwiceHorn

TwiceHorn 31495

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2 minutes ago, Jerry Callo said:

 against public policy.  Couching extortion in the terms of an NDA probably not going to hold up.

Yeah, these are where the "hush money" NDAs are vulnerable.  I'm just interested in how that pans out.  What differentiates holding a client list and pricing structure confidential versus porn-star fucking or other simply embarrassing information?

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Captainant

Captainant 27680

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21 minutes ago, Jerry Callo said:

I think there is a difference between "I'll pay you not to tell anyone about this" and "If you pay me, I won't tell anyone about this."

Similarly, there's a difference between "I'll pay you not to tell anyone about this" and "If you don't take this money and sign this NDA I'll ruin you"

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troph

troph 24851

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I don't think there is any difference unless its coercion - that then is an unenforceable contract.  I imagine the escort NDA is more about concealing unlawful activity, I assume that's a violation of public policy.  and very little of this will hold up in court if you have valid discovery requests.  people confuse confidentiality with confidentiality under the umbrella of attorney client privilege.  one is indestructible, the other only needs a valid discovery request and possibly a protective order.

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Red Six

Red Six 131

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3 hours ago, troph said:

I don't think there is any difference unless its coercion - that then is an unenforceable contract.  I imagine the escort NDA is more about concealing unlawful activity, I assume that's a violation of public policy.  and very little of this will hold up in court if you have valid discovery requests.  people confuse confidentiality with confidentiality under the umbrella of attorney client privilege.  one is indestructible, the other only needs a valid discovery request and possibly a protective order.

I've always wondered if people realize how truly non-confidential their medical records are.

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FondrenRoad

FondrenRoad 4378

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On 6/25/2020 at 10:13 AM, TwiceHorn said:

Yeah, these are where the "hush money" NDAs are vulnerable.  I'm just interested in how that pans out.  What differentiates holding a client list and pricing structure confidential versus porn-star fucking or other simply embarrassing information?

I think it is probably pretty straightforward. But we have some variations.

Stormy had consensual sex with Trump:  he pays her to keep it quiet. If she doesn't, he gets specified damages.

Weinstein rapes a girl: he pays her to keep it quiet. The K is entirely illegal in the first place.

Contestant on survivor signed an nda for no money:  contestant is on the hook for specified damages.

The only real difference is damages. The NDAs we are accustomed to don't itemize them nor do they include an upfront payment. In IP, that is better for both parties most of the time.  Intentional breach is practically open ended when it comes to damages.  

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FondrenRoad

FondrenRoad 4378

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36 minutes ago, used2b said:

Melania is that you?

He pay me nothing. I sign, what you call it, pre nup?  But I get to live in Manhattan Tower and White House.  Plus I have kid that he thinks his kid.  My kid get full inheritance even if maybe he is Mark Wahlberg kid.  Don't know for sure. Apprentice set and Italian Job set same place. 

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elfenix

elfenix 34308

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On 6/25/2020 at 9:13 AM, TwiceHorn said:

Yeah, these are where the "hush money" NDAs are vulnerable.  I'm just interested in how that pans out.  What differentiates holding a client list and pricing structure confidential versus porn-star fucking or other simply embarrassing information?

my bottom line price is competitive information that has a definite value to my competitors.  they know if they can underbid me or not. 

i've never seen a judge really give a shit about a client list.  generally if you're selling something you should know who your target audience is, and your competitors are going after the same audience.  only thing that might be competitive information is knowing that a competitor really relies on one client, and if you can grab that client, your competitor may go out of business.  maybe. 

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TwiceHorn

TwiceHorn 31495

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10 hours ago, FondrenRoad said:

I think it is probably pretty straightforward. But we have some variations.

Stormy had consensual sex with Trump:  he pays her to keep it quiet. If she doesn't, he gets specified damages.

Weinstein rapes a girl: he pays her to keep it quiet. The K is entirely illegal in the first place.

Contestant on survivor signed an nda for no money:  contestant is on the hook for specified damages.

The only real difference is damages. The NDAs we are accustomed to don't itemize them nor do they include an upfront payment. In IP, that is better for both parties most of the time.  Intentional breach is practically open ended when it comes to damages.  

Well, like the Trump book.  Usually a contract won't support an injunction, the remedy is damages.  But there we go.

Also, in most contexts, liquidated damages are somewhat suspect.  Are they going to get a pass in non-technical NDAs?  Do all of them specify liquidated damages?  Technical NDAs don't.

And in the Mary Trump case, they seem to be arguing that because Trump is a public figure, the First Amendment not only counsels against the prior restraint of an injunction, but against the enforcement of the NDA at all.  Note also that the NDA in that case isn't a blanket confidentiality provision, but says no party will publish an account or a book about the proceedings without the consent of the other parties.

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JBJ

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NDAs have liquidated damages because it's usually hard to show actual damages.  There's nothing suspect about liquidated damages where an amount is specified.

I assume the sexual-harrassment-type ones are akin to other settlements: "here's some money, don't tell what the offense was or what the payment was."  There's maybe something in there about both parties agreeing there was no crime involved, but I'm not sure how that would shake out in court if someone signed it and then alleged sexual assault or extortion.

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TwiceHorn

TwiceHorn 31495

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On 7/1/2020 at 12:05 PM, JBJ said:

NDAs have liquidated damages because it's usually hard to show actual damages.  There's nothing suspect about liquidated damages where an amount is specified.

I assume the sexual-harrassment-type ones are akin to other settlements: "here's some money, don't tell what the offense was or what the payment was."  There's maybe something in there about both parties agreeing there was no crime involved, but I'm not sure how that would shake out in court if someone signed it and then alleged sexual assault or extortion.

I would submit that there's nothing particularly difficult about showing damages in a trade secret scenario.  Happens all the time because those don't have liquidated damages provisions.  That may be true in other scenarios, but, as is typical with liquidated damages, I think you have to take it case-by-case.

And I think you meant something else in your second sentence.

And the Mary Trump case is partially reversed, as to Simon & Schuster. https://www.cnn.com/2020/07/01/media/mary-trump-book-reliable-sources/index.html

Quoted from the court's decision:

 "while parties are free to enter into confidentiality agreements, courts are not necessarily obligated to specifically enforce them" and said that such agreements are "alternatively enforceable through the impassion of money damages." 

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