Growing Change: NDAs in Cannabis and Entertainment

Originally designed to protect confidential materials, including assets, NDAs date back to the 1980s and have only become more widespread over time.

Many companies present these legally binding agreements to incoming staff members on their first day of work, often during orientation. While employers spend time working with their legal counsel to ensure their best interests are honored, employees seldomly, if ever, have the ability to meet with an attorney to go over their rights and how they would be impacted during the signing of the provided documents. Signatures are typically expected during the same day, and any delay in signing has the ability to cause a delay to the onboarding process, as well as create an assumption that an individual is difficult to work with. The stark differences in protections only begin when examining the circumstances between the creation of documents and those existing for new staff.

Much of the emerging industries in the United States are based upon levels of competition to ensure cutting edge ideas and innovative and evolving technology to support the future of industries. While trade secrets give each company protections for the way they influence the sector around them, they have also provided a darker side of protections to those employed. 

Last year, two pieces of legislation changed much of that for employees across the country. Led and founded by former Fox Newscasters, Gretchen Carlson and Julia Roginsky, the nonprofit Lift Our Voices has led the charge against silencing victims of workplace sexual harm and misconduct. Legislation changes that went into effect in 2022 began with the ending of forced arbitration in cases of sexual harassment and assault at work. Historically, corporations have long standing agreements with arbiters they select to oversee disputes, which makes an environment ripe for conflict of interests behind closed doors. Similar to NDAs, forced arbitration agreements are often buried as part of onboarding and intake paperwork, and are typically not able to be reviewed with a lawyer present before management or Human Resources requests their completion. 

Paired with non-disclosure agreements, forced arbitration additionally silences survivors of violence through changing the terms of what ramifications actions have, and what terms of consequences are passed to those causing harm. With this, survivors of harm are not only victimized by the actions of the abuser, but then further harmed through workplace backlash, and institutional betrayal. Institutional betrayal “refers to wrongdoings perpetrated by an institution upon individuals dependent on that institution, including failure to prevent or respond supportively to wrongdoings by individuals (e.g. sexual assault) committed within the context of the institution” (Freyd, University of Oregon).

NDAs in the workplace are often one-sided, or strictly written from the perspective that one party is disclosing confidential information and the other party is receiving it. This leaves employers able to talk about experiences with staff, including reactions to abuse, while employees are unable to share about their experiences.

Until the Fall of 2022, when the Speak Out Act was signed into Law, workplace sexual harassment and sexual violence that occurred were typically covered by NDAs. Sexual harassment and violence often leaves emotional impact on those targeted, with the majority of victims citing emotional distress that lingers sometimes long after the harm has discontinued. Some non-disclosure agreements can even have significant financial consequences like fines and associated payouts victims are required to make if any breach occurs. Many of these easily have more financial impact than what settlements, if any, victims receive for their experience. 

Large changes are coming to the entertainment and recreation industries with both pieces of legislation taking effect. These and related industries consistently acquire staff new to the field that are impressionable and there are significant power differentials between those incoming and their bosses. 

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