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Nondisclosure agreements (NDAs) are back in the news, thanks to Stormy Daniels’ alleged affair with Donald Trump. We hear that NDAs are common. The judicial system favors settlement of disputes over going to court. Businesses want to protect proprietary information from disclosure by departing employees.
But don’t NDAs have a downside? How can the legal system send a message about permissible behavior without transparency? How can the market function without information? How can you use your vote properly if a politician has suppressed scandalous information?
Doesn’t the NDA protect bad actors from the sunshine that would make it harder for them to succeed? We may use NDAs all the time, but equal bargaining power in contract formation can be illusory, so this is a policy issue worthy of consideration.
Lloyd Lim
Makiki
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