Thoughts on Enforcing Non-Disclosure Agreements

This month, two women have come forward who credibly claim to have engaged in sexual relationships with a married Donald Trump, prior to his becoming President.  These women cannot speak about the affairs because of non-disclosure agreements.  Fitness model Karen McDougal and pornography actress Stephanie Clifford (aka Stormy Daniels) have both sought declaratory judgments invalidating their NDAs.  Their lawsuits speak of their being “silenced,” and commentators discussing the cases frame them as involving free speech.

Although states can and do void some NDAs as violations of public policy, this “free speech” framing elides important distinctions between government suppression of speech and voluntary decisions to exchange one’s ability to speak for compensation.  Courts should be cautious about interfering with this right to contract by invoking vague notions of free speech.

 

First, of note, Clifford and McDougal allege that their NDAs are invalid for a variety of reasons unrelated to the public policy of free and unfettered discussion about public figures.  They raise contract law defenses, such as improper signatures and fraud in the execution of the contract.  To the extent that these NDAs fail to meet the requirements necessary for enforcement of a contract, Clifford and McDougal raise standard contract claims that undermine the binding nature of their contracts.  If McDougal was indeed misled by a lawyer, secretly motivated by a desire to help Trump, into signing a contract she did not understand, then she did not voluntarily assent to the contract.  In that case, a court voiding her contract would not be interfering with freedom to contract but simply holding that the pre-requisites for a valid, voluntary contract were not met.

However, Clifford and McDougal also allege that their NDAs are void as a matter of public policy.   Courts will override an individual’s ability to bind herself to promises if the contract undermines the state’s public policy goals.  As a result, states do not enforce, for example, contracts involving murder for hire.  McDougal’s complaint eloquently states that her NDA “offends the unwavering public policy of the United States and the State of California to protect free and robust debate on matters of public concern.”   Because “our nation recognizes no higher public policy than the unfettered right to criticize our elected officials and petition the government,” upholding the NDA would “censor and distort” what is essentially “core political speech entitled to the highest protection under the law.”

There are valid public policy reasons, related to free speech values, for a court to decide that it should not enforce NDAs, especially against public figures.  Clifford’s NDA is worded very broadly, and some courts invalidate NDAs that cover too much speech or contain no time limit.  McDougal’s NDA allegedly involves a media company’s efforts to “catch and kill” news items, buying up stories so that they will never be disclosed to the public.  NDAs prevent people, often in relatively less powerful positions, from sharing important truths.  In these two cases, the NDA agreements may also involve the violation of campaign finance laws.  The payouts in support of the NDAs may not have been properly disclosed and may implicate the Trump campaign.

What NDAs do not do, however, is suppress speech in the same way as government censorship.  The First Amendment’s state action component recognizes that state coercion, or a court’s attaching penalties to speech, is more harmful, and harmful in a different way, than a private individual’s actions that may chill your desire to speak.  An individual’s mocking your speech may disincentivize you against speaking out, but it does not censor you.  In contrast, a defamation suit can suppress speech because it attaches serious legal penalties, imposed by a court, to what may be protected speech.  Enforcement of a contract is generally not viewed as state action in cases where individuals voluntarily exchanged their ability to speak for compensation.  Clifford received compensation for her voluntary relinquishment of her ability to speak on a given topic; she was not censored, and will not be censored even if the contract is enforced.

This is a critical point in our current political discourse about free speech, where some claim to be silenced by the mere opinions of their peers, or argue that speech is chilled simply by the expression of views that undermine the legitimacy of particular speakers.  These framings, ultimately, undermine the First Amendment.  No individual has a monopoly of force in the same way as the government, so although certain individuals may hamper one’s desire to speak, or even greatly jeopardize their ability to speak, those actions do not rise to the level of censorship.  The distinction between governmental censorship and private action is necessary to preserve First Amendment rights; individuals are permitted a broad range within which to speak and take non-violent, legal action.  So long as the government doesn’t intervene to remove individual options by punishing speech, through criminal prohibitions or civil penalties, individuals have the opportunity to speak and experiment with different speech arrangements.  Blurring the distinction between individual “chilling” of speech and government censorship would, ultimately, lead to more censorship and truly coercive governmental intervention into free speech to prevent individuals from “censoring” each other.

Even if these two specific lawsuits raise issues about whether the contracts were voluntarily formed, NDAs are a tool that can allow individuals to decide the value they attach to free speech and privacy interests.  A state may decide that there are important free speech values involved – like the necessity for fewer impediments to a robust marketplace of ideas – that mean NDAs should be considered void.   Or, a state may uphold the freedom to contract, giving people enhanced autonomy over their ability to forego their desire to speak and their speech priorities.  We should be careful, however, in our discourse and in our laws, before diminishing the right to contract in the name of a “free speech” interest that isn’t framed correctly.