NDAs, Non-Competes & Arbitration: What They Really Mean for Employees
In today’s workplace, it’s not uncommon for employees to be handed a stack of documents before their first day even begins.
Among those documents, three stand out for their long-term implications:
Non-Disclosure Agreements (NDAs)
Non-Compete Clauses
Mandatory Arbitration Agreements
While these might seem like standard onboarding paperwork, they can have real and lasting consequences for your rights as a worker.
Let’s break down what these agreements mean and what you should know before signing.
NDAs: Protecting Confidential Information or Silencing Workers?
At their core, NDAs are designed to protect a company’s confidential information, like trade secrets, client lists, or proprietary processes. But in recent years, NDAs have come under fire for being overly broad or used to silence employees who experience harassment, discrimination, or retaliation in the workplace.
An enforceable NDA should be specific, reasonable in scope, and limited to protecting legitimate business interests. If it seems like the agreement would stop you from speaking out about unlawful behavior or sharing your own experiences, that’s a red flag. Many states, including California, are increasingly placing limits on how NDAs can be used, especially in cases involving workplace misconduct.
Non-Competes: Restricting Future Job Opportunities
A non-compete clause is intended to prevent employees from working for competitors or starting a similar business for a certain period of time after leaving their employer. These clauses can be especially harmful to employees in creative, tech, and professional fields where experience and networks are everything.
In California and a growing number of other states, non-competes are largely unenforceable because they conflict with public policy that favors open competition and worker mobility. But even unenforceable clauses can have a chilling effect, causing workers to stay put out of fear or confusion.
If you’re presented with a non-compete, it’s important to understand your rights. In many cases, you may be able to challenge its validity or negotiate its terms.
Mandatory Arbitration: Giving Up Your Day in Court
Arbitration agreements often require employees to waive their right to sue their employer in court, instead sending disputes to private arbitration. Employers argue that arbitration is faster and less expensive, but it also tends to favor companies, limit transparency, and prevent employees from joining together in class actions.
In California, the use of mandatory arbitration, particularly for employment disputes, has been the subject of ongoing legal and legislative battles. Some arbitration clauses may be unenforceable depending on how and when they’re presented. Others may violate your rights under state or federal law.
Know Before You Sign
At ARS Counsel, we believe every worker deserves to understand the agreements they’re being asked to sign because these contracts don’t just protect employers; they can also limit your rights.
Before signing anything, especially documents with legal jargon or unclear terms, it’s worth having them reviewed by an attorney. You have the right to ask questions, negotiate terms, and make informed decisions about your career and future.
Your signature should never come at the cost of your rights.
If you’ve been asked to sign an NDA, non-compete, or arbitration agreement, or think your rights may have been violated, reach out to us!