Contract law: Do NDAs help or hurt for sexual harassment claims?

On Behalf of | Apr 16, 2020 | Contract Law |

New businesses in North Carolina have to contend with many different kinds of legal matters, and contracts are just one facet of that. Recently, a great deal of discussion has centered around one certain type of contract law: non-disclosure agreements. NDAs primarily serve as a means for a business to protect proprietary information, though many workers complain that NDAs often prevent or hinder them from bringing claims of sexual harassment against a company. Others argue that doing away with NDAs may stop an employee from settling a sexual harassment claim and actually force them to either take the claim to trial or forgo it altogether. Experts say that the matter is very complex and all businesses should be familiar with what NDAs do and don’t do for them.

Certain states have gone so far as to outlaw the binding effects of an NDA in the case of a sexual harassment claim. They say that bringing these stories out into the open helps victims and others who may deal with the accused business. NDAs usually deal with trade secrets of a business, but they may also prevent employees from discussing anything that happens at the company. That doesn’t always mean that employees with a legitimate claim have no legal recourse, as they may be able to reach a financial settlement.

However, some say that NDAs can actually give victims more options. They point out that not all victims want to publicly reveal their experience and may prefer privately settling with the company. If the NDA is removed, the victim must go to court or simply not do anything at all.

None of this means that NDAs have no value for businesses. The opposite is true: NDAs can protect a company from a former employee revealing company secrets to a competitor. What matters is that a North Carolina business has all of its contracts drawn up by experienced legal professionals. Attorneys who have extensive knowledge of contract law can help a company protect itself and ensure that employees are treated with fairness.