Does signing an NDA forfeit the right to blow the whistle?
In light of the European Union’s 2019 Whistleblowing Directive, you may be left wondering whether signing a non-disclosure agreement (NDA) can prevent employees from blowing the whistle. This is also essential information for potential whistleblowers, who may fear they are breaking the law by speaking up.
Protection under the EU Directive
When it comes to breaches of EU law, whistleblowers are protected under the 2019 Whistleblowing Directive. This includes the provision that individuals cannot be held liable, even where trade or other secrets are concerned. Furthermore, it will not be possible to contract out of the right to blow the whistle through an NDA, confidentiality or loyalty clause. This means that those who wish to speak up, but have also signed such an agreement, can rest easy in the knowledge that it would not prevent them from doing so.
Caveats
Despite the desire of companies to fool-proof themselves against reputational harm, they cannot prevent individuals from protected disclosures. In fact, any lawyer that attempts to draft such a contract could be committing misconduct themselves. This is of particular concern when it comes to unfounded claims, however a robust whistleblowing system can go a long way in mitigating the risks associated.
For whistleblowers however, it is paramount to be informed on exceptions in whistleblowing protections. The 2019 EU Directive does not offer protection in cases where national security can be invoked or in instances of breaches to national rather than EU law. These and other shortcomings can leave whistleblowers vulnerable to retaliation and other negative consequences, which is why it is imperative one is thoroughly informed ahead of time.
In sum, NDAs or other such agreements do not prevent whistleblowers from reporting misconduct. Other areas however do present challenges to the right to blow the whistle and it is important to know what these are ahead of time. Companies can reduce the likelihood of false reports by implementing robust whistleblowing solutions, encouraging positive company culture and projecting a zero-tolerance policy for corruption and misconduct.
Further reading:
Amphlett J (2019) ‘NDAs and whistleblowing: a trap for the unwary.’ Howard Kennedy, 7 May. [15 June 2022] Available at: https://www.howardkennedy.com/en/latest/blog/ndas-and-whistleblowing_a-trap-for-the-unwary
Terracol M (2019) Building on the EU Directive for whistleblower protection: Analysis and recommendations. Transparency International, #1.
