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<xTITLE>The Ethics of NDAs in Mediation and Arbitration</xTITLE>

The Ethics of NDAs in Mediation and Arbitration

by Colin Rule, Brittany Munn, Brian Farkas, Julie Macfarlane, Amy Schmitz, Jody Newman, Nancy Welsh
February 2022 and believe that the use of NDAs, or not, is an important topic for mediators and arbitrators to confront, so we convened an online colloquium on February 15, 2022 with experts on NDAs to discuss best practices and guidelines for their use. 

This online colloquium examined the current use of NDAs in arbitration and mediation and discussed how they can be utilized without crossing any ethical lines.  We also discussed the role of legislation and how much party autonomy should govern NDA drafting and use.  And we also attempted to identify best practices that mediators and arbitrators can follow to ensure they balance the interests of their parties with the wider public interest. 

We hope that you find this article and the recorded NDA Forum to be of great value!



Dr. Julie Macfarlane, University Professor and Professor of Law (Emerita) at the University of Windsor; Co-Founder, Can’t Buy My Silence a global campaign to limit the use of NDAs

Professor Brian Farkas, Cardozo Law School

Jody L. Newman, Employment lawyer/Mediator, of Counsel, Boston Law Collaborative Moderators:

Prof. Nancy Welsh (Professor of Law, Director of Aggie Dispute Resolution Program, Texas A&M University School of Law) and

Prof. Amy Schmitz (Professor of Law, The Ohio State University Moritz College of Law)

Sponsors and Supporters

  • Texas A&M University School of Law
  • The Ohio State University Moritz College of Law
  • and

The news these days is filled with stories about nondisclosure statements, or NDAs.  Whether it’s a California judge ruling that Google’s NDAs for employees violate labor laws, or Michigan lawmakers signing NDAs ahead of a controversial vote on financial incentives, or a TikTok poster making her friends sign NDAs before she tells them the latest gossip, NDAs have entered the popular culture in a big way.  Maybe the anxiety we feel living in an era where our privacy is being whittled away by technology has put a spotlight on NDAs as the only way to make confidentiality legally binding.

This is a long journey from where NDAs started out.  NDAs were originally created to protect trade secrets and proprietary information in very specific commercial contexts.  But now NDAs have expanded to cover a wide variety of issues, from workplace harassment and discrimination to product liability to commercial settlements.  Today, over one-third of the American workforce is bound by a non-disclosure agreement.

NDAs have become widely used for two main reasons. First, they can be indefinite, or essentially forever binding. Second, they can be broad in scope, frequently constraining parties from sharing information even in private contexts.  But this expansion of the reach of NDAs has now raised a troubling set of ethical questions about their use: Are there third parties not involved in the agreement who might be adversely affected if information is hidden? Are vulnerable people being told they must agree to sign an NDA as a precondition for resolution, and then being intimidated into lifelong silence, even when they later feel the need to seek help or counseling?  Should the public’s right to know be taken into account?

These are important questions for dispute resolution professionals to consider.  Many mediators and arbitrators have integrated NDAs into their decisions or settlement agreements, but there has been little discussion of the ethical considerations that go along with the use of NDAs in dispute resolution.  

The law on NDAs is still unsettled.  Courts have ruled that NDAs should be “. . . narrowly tailored to protect the legitimate business interests” or the employer.  Overly broad language in the agreements may render them unenforceable. If the language does not “reasonably serve the legitimate interests of the employer,” it probably will be seen as too restrictive. 

As Amy Schmitz put it in “confidentiality clauses may be overly oppressive where they hinder the public’s access to information impacting health and safety. These clauses also are problematic when they impede individuals’ abilities to obtain information regarding prior claims that they may need to prove patterns of discrimination or other legal violations they may need to succeed on statutory claims. It is in these cases that courts have held such agreements unconscionable or otherwise unenforceable under contract law defenses. This is especially true when there is uneven bargaining power, such as in consumer and employment contexts.” (“Assuming Silence in Arbitration,” New Jersey Lawyer Magazine, 2011).

The South Carolina Court of Appeals ruled in 2017 that language in non-disclosure agreements could be so broad that the agreement effectively becomes an invalid non-compete agreement. Fay v. Total Quality Logistics, LLC, 419 S.C. 622 (S.C. Ct. App. 2017).   If, for example, an employment agreement says the employee can never disclose any information which the employee had access to during the period of employment, then that employee will find it very difficult to ever work in the same industry again without broaching the agreement.  A similar sentiment was voiced in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dewey, 18 Mass. L. Rptr. 49 (Super. Ct. 2004), where the Court focused on how nondisclosure agreements cannot prevent the solicitation of customers known to the restricted party, arguing that NDAs that do are so overly broad that they effectively become a non-solicitation agreement.

The First Circuit provided more clarity on non-disclosure agreements in TLS Mgmt. & Mktg. Servs., LLC v. Rodriguez-Toledo, 2020 WL 4187246 (1st Cir. July 21, 2020). The Court noted that “a nondisclosure agreement is overly broad and invalid when the agreement prohibits disclosure of information that is not in fact confidential, because it’s public knowledge.” The Court went on to further discuss two other situations where non-disclosure agreements are overly broad. First, overly broad agreements occur when the agreement extends to information properly provided by third-party sources to the defendant. Second, if the restriction is “‘[un]necessary for the protection of the employer’s business,’ ‘reasonably restrictive of the employee’s rights,’ and ‘prejudicial to the public interest,’” the agreement is overly broad. Further, covenants that are restrictive must be narrowly tailored while bearing a reasonable relationship to the legitimate business interests of an employer. 

Most notable about the First Circuit’s decision was language in a footnote hinting that revising overly broad provisions can be contrary to public policy. The Court however noted that [overbroad nondisclosure agreements] “raise the same policy concerns about restraining competition as noncompete clauses where, as here, they have the effect of preventing the defendant from competing with the plaintiff.” Other U.S. courts have followed TLS Mgmt. & Mktg. Servs. by applying the same standard to other restrictive covenants. 

These decisions have largely focused on commercial NDAs, but they signal a willingness to rein in the most egregious abuses.  Legislators have also begun to notice this issue as well, and they are proposing bills to constrain the scope of NDAs.  Prince Edward Island in Canada became the first province to place restrictions on NDAs, proposing a bill that explicitly prohibits the use of NDAs to keep individuals from reporting unlawful actions. California recently enacted a similar law, barring settlement agreements from containing nondisclosure agreements preventing the disclosure of facts related to claims of sexual harassment and sex discrimination.  Further, the House Judiciary Committee recently advanced legislation to end forced arbitration in lawsuits involving sexual assault and harassment claims. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 is a bipartisan bill that would dramatically change the landscape of sexual harassment disputes in the workplace. If passed, this law would allow many employees to sue for workplace sexual misconduct by prohibiting the enforcement of mandatory arbitration clauses. More may be coming soon.


Colin Rule is CEO of Resourceful Internet Solutions, Inc. ("RIS"), home of,,, and a number of additional leading online dispute resolution initiatives.  From 2017 to 2020, Colin was Vice President for Online Dispute Resolution at Tyler Technologies. Tyler acquired, an ODR provider that Colin co-founded, in 2017.  Previously, from 2003 to 2011, Colin was Director of Online Dispute Resolution for eBay and PayPal.  Further, Colin co-founded Online Resolution in 1999, one of the first online dispute resolution (ODR) providers, and served as its CEO and President.  Colin also worked for several years with the National Institute for Dispute Resolution in Washington, D.C. and the Consensus Building Institute in Cambridge, MA.

Colin is the author of Online Dispute Resolution for Business, published by Jossey-Bass in September 2002, and co-author of The New Handshake: Online Dispute Resolution and the Future of Consumer Protection, published by the ABA in 2017. Colin received the first Frank Sander Award for Innovation in ADR from the American Bar Association in 2020, and the Mary Parker Follett Award from the Association for Conflict Resolution (ACR) in 2013. Colin holds a Master’s degree from Harvard University’s Kennedy School of Government in conflict resolution and technology, a graduate certificate in dispute resolution from UMass-Boston, a B.A. from Haverford College, and Colin served as a Peace Corps volunteer in Eritrea from 1995-1997.  You can read many of Colin's articles and see some of his talks at


Brittany Munn is a second-year law student at The Ohio State University Moritz College of Law. She is a member of the New York City Bar National Moot Court Team, the Vice President of Auction Fundraising for the Public Interest Law Foundation, and on the Long Range Planning Committee for the Student Bar Association. She is expected to graduate in May 2023 as a Public Service Fellow with Dean’s Highest Honors for completing over 450 hours of volunteer legal service.

Prior to law school, Brittany earned a Bachelor of Science in Social Work from The Ohio State University in 2020.

Brian Farkas is an attorney at Arent Fox LLP, focusing his practice on complex commercial litigation. He represents clients in state and federal court, as well as in arbitration and mediation proceedings. Previously, Brian served as a judicial law clerk to the Honorable Robert W. Lehrburger of the U.S. District Court for the Southern District of New York, and as a litigation associate at a midsize firm in New York City.

In 2019, 2018, 2017 and 2016, he was named a “Rising Star” by Super Lawyers for Business Litigation. He is admitted to practice in New York, New Jersey and the District of Columbia.

At Cardozo, Brian teaches arbitration and dispute resolution. He has taught courses on negotiation, mediation, and conflict management at the City University of New York, the University of Oregon School of Law, and Brooklyn Law School. Brian has also served as a volunteer mediator in New York County and Kings County through the New York Peace Institute. He has taught in Brooklyn Law School’s Mediation Clinic, training students in Civil Court and Small Claims Court mediation.

Brian’s academic writing on arbitration and mediation has appeared in numerous publications, including the N.Y.U. Journal of Law & Business, the Lewis & Clark Law ReviewHarvard Negotiation Law ReviewJournal of Experiential LearningDispute Resolution Journal, and the Northeastern Law Journal.

While he was a student at Cardozo, Brian served as Editor-in-Chief of the Cardozo Journal of Conflict Resolution and was awarded the Andrew S. Zucker Award for Academic Excellence. He earned his M.P.A. from New York University’s Robert F. Wagner Graduate School of Public Service, where he served as a Contributing Editor of The Wagner Review.

Professor Julie Macfarlane is a Canadian law professor who has spent her career researching, writing about and advocating for access to justice. She is Director of the National Self-Represented Litigants Project, and now Emerita Distinguished University Professor at the University of Windsor. Julie has researched and written on the legal system and the role of lawyers (The New Lawyer : How Clients are Transforming the Practice of Law 2nd edition, UBC Press 2017) and misperceptions of and prejudice towards Muslim communities in North America (Islamic Divorce in North America : Choosing a Shari’a Path in a Secular Society (OUP 2012). Her new book (Going Public: a Survivor’s Journey from Grief to Action Between the Lines Press, 2020) describes her personal experiences of sexual violence and her efforts to use the legal system for change. Most recently, Julie has been campaigning internationally (with Zelda Perkins) to end the widespread use of non-disclosure agreements or NDAs. Julie’s work has been recognized with a number of honours, including the Order of Canada (2020), named as one of Canada’s 25 Most Influential Lawyers (2017), the David Mundell Medal for Legal Writing (2016), and the first-ever Canadian recipient of the International Academy of Mediators Award of Excellence (2005). 


Amy Schmitz is the John Deaver Drinko-Baker & Hostetler Chair in Law at the Ohio State University Moritz College of Law. From 2016-2021 Professor Schmitz was the Elwood L. Thomas Missouri Endowed Professor of Law at the University of Missouri School of Law and the Center for Dispute Resolution. Previously she was a Professor at the University of Colorado School of Law for over 16 years. Prior to teaching, Professor Schmitz practiced law with large law firms in Seattle and Minneapolis, and served as a law clerk for the U. S. Court of Appeals for the 8th Circuit.  Professor Schmitz teaches courses in Contracts, Lawyering, Online Dispute Resolution (ODR), AI, Data Analytics and the Law, Arbitration, International Arbitration, and Consumer Law. She has been heavily involved in ODR teaching and research for a long time and is a Fellow of the National Center for Technology and Dispute Resolution, as well as the Co-Chair of the ABA Technology Committee of the Dispute Resolution Section and the ODR Task Force.  She serves on the Association of American Law Schools Executive Committee on Commercial and Consumer Law, was an External Scientific Fellow of the Max Planck Institute Luxembourg, and is a researcher with the ACT Project exploring AI and ODR. Professor Schmitz also hosts The Arbitration Conversation, a highly regarded podcast that has reached over 100 episodes. She has published over 60 articles in law journals and books, is a co-author of the leading casebook, Resolving Disputes: Theory, Practice and Law (Aspen/Wolters Kluwer 2021), the new book with Stipanowich, Arbitration: Theory, Practice and Law (Forthcoming Aspen/Wolters Kluwer 2022) and a book with C. Rule, The New Handshake: Online Dispute Resolution and the Future of Consumer Protection.

Jody Newman

Jody L. Newman, Employment lawyer/Mediator, of Counsel, Boston Law Collaborative Moderators:

Jody L. Newman is an employment lawyer, independent investigator and mediator with more than 35 years’ experience in resolving workplace disputes and investigating bias and sexual misconduct cases across workplaces and college campuses.

Jody’s deep experience resolving employment disputes is unique in that she spent most of her career representing individuals in a boutique litigation firm and, more recently, serving businesses in the Boston office of a large global law firm. Jody’s in-depth experience in employment litigation, including numerous jury trials, non-jury, administrative hearings and appeals, made her an early adopter to ADR and collaborative law practices for the valuable closure it achieved for clients without the risks of litigation. Jody is a tenacious and passionate advocate for her clients for whom she has resolved the most entrenched and contentious employment disputes.

Jody’s experience includes representing individuals in all industries from the trades to the C-Suite. She is also well-versed in helping employers avoid being sued through best practices, including the revelations of the #MeToo movement on the ineffectiveness of existing sexual harassment policies. Jody is skilled at keeping employers abreast of the rapidly evolving state and local legislation addressing paid sick leave, paid family and medical leave and pay equity laws, and most recently, advising businesses on their COVID-19 response.

Nancy Welsh is a recognized scholar and has been a professor of law for the last 20 years, teaching dispute resolution and procedural law. She has dedicated the better part of her career to the practice, system design and assessment of mediation and other negotiative and conflict management processes, including negotiation, arbitration, and judicial settlement. Specifically, her attention has remained focused on the examination of client self-determination, procedural justice, due process, and institutionalization dynamics. In recent years, with the advent of digital technology and online dispute resolution (ODR), which has added considerable complexity to dispute systems design, she has been at the forefront engaged in the important work of examining what is required for a person seeking the resolution of an issue or controversy to experience a sense of fairness and justice is what appears to be a distant and remote institutionalized delivery system. While the future she envisions for mediation and other negotiative processes remains unsettled, she has no doubt about their inevitability and he inquiry is critical inquiry is essential for our preparation.

She is well equipped for the task. She graduated magna cum laude from Allegheny College in her home state of Pennsylvania, and with a J.D. and M.A. degree from Harvard Law School in 1982. Notably, she studied and worked with Frank Sanders, the now legendary author of the original dispute resolution system design, the Multi-Door Courthouse. In 2006, as a Fulbright Scholar, she did research and taught in the Netherlands, and in 2016, returned to Harvard’s Program on Negotiation as a Visiting Scholar, and has also been a Visiting Fellow of the Institute for Advanced Study at Indiana University-Bloomington, and in 2019 began serving as the Boden Visiting Professor at Marquette University Law School.

Nancy is a co-author on what has become a seminal text in conflict resolution, DISPUTE RESOLUTION AND LAWYERS, 5TH ED., with among others, the original author, Len Riskin, and has published numerous articles of significance, many of which have received high praise and acknowledgment.