No — an NDA does not cover illegal activity. Courts refuse to enforce confidentiality provisions that would shield criminal conduct, fraud, harassment, or other violations of law, and several federal statutes go further by protecting people who report wrongdoing and penalizing employers who try to silence them. What you signed does not override your right to report a crime, cooperate with investigators, or file a complaint with a government agency.
Why an NDA Cannot Legally Silence You About a Crime
Every contract needs a lawful purpose to be enforceable. When a confidentiality clause’s practical effect is to help someone escape the consequences of breaking the law, courts treat that clause as void under the public policy doctrine — private agreements cannot override the public’s interest in law enforcement and accountability.
The agreement does not have to say “keep this crime secret” to fail. A court asks whether enforcing the clause would help someone get away with unlawful conduct. If the answer is yes, the clause falls. An NDA that has the effect of preventing you from reporting fraud, testifying about harassment, or cooperating with a government investigation is just as unenforceable as one that spells out an illegal purpose in bold type.
What Kinds of Conduct an NDA Cannot Cover
The range is broad. If the underlying behavior violates federal, state, or local law, a confidentiality clause covering it is on shaky ground. The situations that come up most often:
- Workplace discrimination and harassment. Federal law prohibits discrimination based on race, color, religion, sex (including pregnancy, sexual orientation, and transgender status), national origin, age (40 and older), disability, and genetic information. An NDA cannot prevent you from filing a complaint about any of these.1U.S. Equal Employment Opportunity Commission. Know Your Rights: Workplace Discrimination is Illegal
- Wage theft. Failing to pay minimum wage or overtime under the Fair Labor Standards Act is illegal, and an NDA cannot stop you from reporting it.2U.S. Department of Labor. Wages and the Fair Labor Standards Act
- Financial fraud. Embezzlement, securities manipulation, and falsified accounting records remain reportable regardless of what you signed.
- Workplace safety violations. Conditions that endanger workers violate OSHA regulations, and confidentiality agreements cannot gag employees who want to report hazards.
- Government contract fraud. Overbilling the government, delivering substandard products on federal contracts, or submitting false claims for payment are all reportable despite an NDA.
This list is not exhaustive. The principle covers any conduct that violates the law. If you are unsure whether what you witnessed crosses from unethical into illegal, that is worth a conversation with an attorney before you act — but the NDA itself does not settle the question.
When Enforcing an NDA Becomes a Federal Crime
Something many people signing these agreements do not realize: using an NDA to keep someone from cooperating with a government investigation or testifying in a legal proceeding is not just unenforceable. It can be a separate federal crime. Under federal witness tampering law, anyone who corruptly persuades another person to withhold testimony, conceal documents, or avoid communicating with law enforcement faces up to 20 years in prison.3Office of the Law Revision Counsel. 18 U.S. Code 1512 – Tampering With a Witness, Victim, or an Informant
The word “corruptly” does a lot of work. Explicit threats are not required. Telling someone to “keep quiet” or reminding them of NDA penalties when a federal investigation is underway can be enough, and the crime does not require success. An attempt to use confidentiality obligations to discourage cooperation, if made with corrupt intent, can trigger charges even if the witness ultimately speaks up.
An employer who waves an NDA at a worker to discourage them from talking to regulators is not just holding an unenforceable piece of paper. That employer may be committing a felony.
Federal Laws That Protect You for Reporting
Several federal statutes go beyond simply voiding NDAs. They create enforceable protections, and in some cases financial awards, for people who report illegal activity.
Securities Fraud
The SEC accepts whistleblower tips through an online complaint system and pays awards of 10 to 30 percent of the money collected when the information leads to a successful enforcement action with sanctions exceeding $1 million.4Securities and Exchange Commission. SEC Issues $24 Million Awards to Two Whistleblowers Employees of publicly traded companies get another layer of protection under the Sarbanes-Oxley Act: companies cannot discharge, demote, suspend, threaten, or otherwise retaliate against employees who report conduct they reasonably believe is securities fraud or an SEC rule violation. That protection cannot be waived by any agreement, including an NDA.5Office of the Law Revision Counsel. 18 U.S. Code 1514A – Civil Action to Protect Against Retaliation in Fraud Cases
Government Contract Fraud
The False Claims Act lets individuals file lawsuits on behalf of the federal government against companies that defraud federal programs. Whistleblowers receive between 15 and 25 percent of any recovery when the government joins the case, and between 25 and 30 percent when they pursue it on their own. Workers who face retaliation are entitled to reinstatement, double back pay, interest, and attorney’s fees.6Office of the Law Revision Counsel. 31 U.S. Code 3730 – Civil Actions for False Claims
Safety and Discrimination Complaints
OSHA enforces whistleblower protections under more than 20 federal statutes covering workplace safety, environmental violations, transportation safety, and financial reform, among others. If OSHA finds retaliation, it can order reinstatement and lost wages.7Occupational Safety and Health Administration. OSHA’s Whistleblower Protection Program The EEOC handles complaints about discrimination, harassment, and retaliation.1U.S. Equal Employment Opportunity Commission. Know Your Rights: Workplace Discrimination is Illegal Filing with either agency is protected regardless of what your NDA says.
Sexual Harassment and Assault
Congress passed the Speak Out Act in 2022 to make predispute nondisclosure and nondisparagement clauses unenforceable when the underlying dispute involves sexual assault or sexual harassment.8Office of the Law Revision Counsel. 42 U.S. Code 19403 – Limitation on Judicial Enforceability of Nondisclosure and Nondisparagement Contract Clauses Relating to Sexual Assault Disputes and Sexual Harassment Disputes
The word “predispute” matters. If you signed a confidentiality clause before the harassment or assault occurred, that clause cannot be enforced against you where the alleged conduct violated federal, tribal, or state law. The Act does not apply to settlement agreements you negotiate after a dispute arises, where both sides knowingly agree to confidentiality as part of a resolution. A blanket NDA signed at hiring is treated very differently from a settlement signed with counsel after an incident.
Reporting Without Losing Trade Secret Protection
Many NDAs exist to protect trade secrets, and employees often worry that reporting illegal activity will drag confidential business information along with it. Federal law addresses this directly. Under the Defend Trade Secrets Act, you cannot be held criminally or civilly liable for disclosing a trade secret if you make the disclosure in confidence to a government official or an attorney solely for the purpose of reporting or investigating a suspected violation of law.9Office of the Law Revision Counsel. 18 U.S. Code 1833 – Exceptions to Prohibition
You also have the right to disclose trade secrets in court filings tied to a retaliation lawsuit against your employer, provided you file the documents under seal and do not publicly disclose the information except by court order. Employers must include a notice of this immunity in every contract governing the use of trade secrets or confidential information. If your employer skipped the notice, it loses the ability to recover enhanced damages or attorney’s fees if it later sues you for misappropriation.9Office of the Law Revision Counsel. 18 U.S. Code 1833 – Exceptions to Prohibition Check your agreement. A missing notice tells you something.
What Stays Enforceable
A ruling that your NDA cannot cover specific illegal activity does not usually destroy the rest of the agreement. Most NDAs include a severability clause telling a court to strike the unenforceable provisions and leave the remainder intact. If the portion attempting to silence you about fraud is void, the clauses protecting legitimate trade secrets, client lists, or proprietary financial data typically survive.
That cuts both ways. Do not assume that because one part of your NDA falls, everything covered by the agreement is fair game. Obligations tied to genuinely confidential, lawful business information remain binding. Report the illegal activity to the right authorities, but do not treat the situation as a license to share your former employer’s client database with a competitor. The line between protected whistleblowing and general breach of confidentiality is real, and crossing it can expose you to liability even when your initial report was justified.
State Law May Add More
Federal protections are the floor, not the ceiling. Nearly 20 states have enacted their own restrictions on NDAs related to sexual misconduct in the workplace. Specifics vary: some states void NDA provisions in harassment settlements altogether, others let the victim choose whether confidentiality is included. Because these laws differ significantly and continue to change, anyone negotiating a settlement that includes a confidentiality clause should confirm what their state currently allows. A provision enforceable in one state may be void in the next one over.