- 45% of workers surveyed said they were subject to a non-disclosure agreement.
- 39% of workers said they were bound by mandatory arbitration, according to a Pennsylvania survey.
- Agreements are not enforced equally: 27% of women said they were subject to a non-compete, compared to 17% of men.
Nondisclosure agreements and mandatory arbitration are becoming common in the workplace, according to a new study of job seekers. A second survey found that employees who file a lawsuit in court receive higher payouts than those required to pursue claims through arbitration.
Research papers by Mark Goff, assistant professor of labor and employment relations at Pennsylvania State University, reveal the prevalence of companies adopting mechanisms to silence employees and dictate the terms by which allegations of workplace misconduct are resolved.
In one study, which is scheduled to be released later today before submitting the results for peer review, Gough surveyed 947 people looking for jobs across a wide range of industries in the United States during the summer and fall of 2024, asking participants whether they would be obligated to work in the latest Their employment contract has a variety of restrictive covenants, including nondisclosure agreements, noncompete clauses, and nonsolicitation clauses.
In a study titled “Binding Contracts: Untangling the Use of Nondisclosure Agreements, Forced Arbitration, and Other Restrictive Covenants in the American Labor Market,” Gough found that NDAs have become ubiquitous, with 45% of respondents being required to sign them as a condition of their employment. Employment.
Mandatory arbitration has also become common, with 39% of participants adhering to it. Twenty-two percent said they had to sign a non-compete.
Gough found that these agreements were not uniformly enforced. For example, 48% of Black participants reported that they were asked to sign a waiver of their right to participate in a class action, compared to 39% of White participants. While 42% of white respondents said they were bound by nondisclosure agreements, that percentage jumped to 45% for black respondents and 53% for Asian respondents.
Women reported committing to non-competitive things at a higher rate – 27%, compared to 17% for men. Women also reported that they signed nondisclosure agreements at a slightly higher rate than men, 47% versus 43% for men.
Restrictive covenants were imposed more often on college graduates than on those without degrees. Several agreements — mandatory arbitration, class action waivers, and nondisclosure agreements — were more common among participants 50 or older.
“There’s a lot of silence, and it’s felt unevenly across the workforce,” Gove told Business Insider. “Even in terms of terms that employers care about, these things are not free. You are alienating your potential employees. Immediately, they think less of your company. This has consequences, especially in a competitive job market.”
Survey respondents expressed particular concern about being required to sign non-compete agreements, mandatory arbitration agreements, and non-disclosure agreements.
While the widespread use of NDAs in the workplace is no secret, measuring the frequency and scope of NDAs has been difficult given the nature of the agreements. Several employees who previously shared copies of their NDAs with BI said they regretted agreeing to them and did not fully understand the restrictions they were burdened with by signing.
Originally, non-disclosure agreements were designed to protect confidential trade secrets. But over time, the language used in these confidentiality agreements has expanded to include non-disparagement clauses and restrictions on disclosure of alleged workplace misconduct. The use of NDAs to silence victims of harassment and discrimination, in particular, has been hotly debated for much of the past decade, with new laws passed at the state and federal levels in the wake of the #MeToo movement that have restricted companies’ ability to enforce NDAs in those cases.
“These gagging agreements have allowed a lot of American companies to remain spotless,” Gretchen Carlson, a former Fox News anchor, told BI. Carlson co-founded the nonprofit advocacy organization with political consultant Julie Roginsky Raise our voiceswho advised Gove in his research. Women helped lead the effort to pass the most prominent piece of federal legislation to restrict the use of nondisclosure agreements, the Speak Out Loud Act of 2022, which prohibits the use of nondisclosure agreements to silence victims of sexual assault and harassment.
For Gough’s second study, “Forcing to Settle: The Invisible Costs of Arbitration vs. Litigation,” he surveyed 479 employment law attorneys about their experience pursuing claims in court and through private arbitration. This survey found that employee plaintiffs are more likely to prevail in disputes brought in court and receive significantly larger payouts than those who resort to arbitration.
“These findings raise critical questions about whether arbitration can serve as an effective alternative to litigation, especially when it comes to providing fair financial compensation,” Gough wrote.
Roginski told BI that the findings confirm her experience, that harassment and discrimination claims forced into arbitration are usually resolved in the company’s favor and leave employees no option to appeal.
“The arbitrator knows that they can return for more business with the company; it is in their best interest to rule in the company’s favor,” Roginski said. When it comes to filing a lawsuit, she said, “If you have a forced arbitration clause, what’s the point?”
In 2021, BI published a series of stories examining the deployment of nondisclosure agreements and nondisparagement agreements at Silicon Valley technology companies, based on a review of records shared by employees. Since then, several employees have come forward to breach their non-disclosure agreements and speak out about sexual harassment and discrimination, sparking controversy over the misuse of NDAs to silence whistleblowers, and prompting Apple executives to pledge in 2022 to restrict how the company uses NDAs. Disclosure moving forward. .
Matt Drang is an investigative reporter at Business Insider. He has frequently covered workplace misconduct cases related to nondisclosure agreements. Do you have a story tip? Connect with Matt safely.
