What Is a Nondisclosure Agreement, and When Is It a Red Flag?

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Commonly referred to as NDAs, nondisclosure agreements are binding legal contracts between two or more parties that agree to keep certain information confidential. The scope of an NDA can vary widely, and may cover anything from specific details of a project to confirming that you're associated with a project at all. 

The goal of an NDA in the entertainment industry is to protect the privacy of a project, and specifically to prevent competitors from gaining information that could be used against a project. NDAs help ensure that the art being made remains as valuable as possible, which should benefit everyone involved. 

How do nondisclosure agreements work? 

Generally speaking, NDAs in entertainment function by limiting what performers and other professionals can say publicly about a specific project they're working on. What details need to be kept confidential will vary from one project to another, and the bigger the project, the more far-reaching the NDA might be. For example, Marvel Studios is know for using extremely broad NDAs that cover all information that is not already public knowledge, so that they can clamp down on leaks as swiftly as possible. Meanwhile, the NDA for a smaller project may only cover a few specific details.

When are performers asked to sign NDAs?

While every studio and producer is going to have their own procedure around NDAs, it's not uncommon for NDAs to come up in the early stages of a project. After all, there might be confidential script or casting details that a performer would need to know before even being confirmed for a role. Since it isn't in a production's best interest to reveal secrets first and request confidentiality later, be prepared to sign on the dotted line before you're able to get a foot in the door— especially for a project that doesn't have a lot of publicly available information. 

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What provisions might be included in an NDA?

The contents of an NDA can vary greatly from one production to another, but all NDAs should identify all of the parties bound by the document, the definition of "confidential information" within the context of the contract, the scope of the signatory's obligation, and the term of the agreement. Basically, an NDA should be clear on who it applies to, what information it refers to, what the recipient may or may not do with that information, and for how long. 

Beyond these basics, there are a number of other clauses which may appear in an entertainment NDA. Below are some of the most common. 

• Exclusions: If an NDA includes an exclusion provision, that means that it allows for certain scenarios in which the recipient may discuss the confidential information covered by the agreement without penalty. This could be due to information becoming public in another way, or due to a legal process in which the recipient is compelled by a court to reveal confidential information. 
• Non-circumvention: These are clauses intended to make sure that the recipient doesn't sidestep the intent of the agreement in order to deliver confidential information to a competitor. 
• Damages: If you have a liquidated damages clause in your NDA, it means that the document stipulates that you could be held financially responsible for if you violate the agreement—and how much money is at stake. 
• Return of Materials: In the event that confidential materials are exchanged, there could be a provision stipulating how long the receiving party has to return them.   
• No Guarantees: Frequently, performers may be asked to sign NDAs before being cast in a role. This provision makes it clear that signing an NDA doesn't mean they're going to be hired. 
• Property Rights: This clause clarifies that just because the recipient may have access to confidential information does not give them any ownership over it. 
• Termination. In the event that both parties decide to cancel the agreement, it's helpful to have a clause in the contract that stipulates how they can do that. 
• General Provisions: These are a collection of standard provisions to ensure the document is watertight, and that neither party is left with any questions. They may address how potential disputes will be settled, what happens if one part of the agreement is deemed invalid in court, the rights of the parties to enforce the agreement, what happens if either party is acquired by a new company, who is responsible for paying the attorney's fees in the event of a lawsuit, and other miscellaneous legal issues. 

How long do nondisclosure agreements last?

The typical term for an NDA in most businesses is anywhere from one to five years, but on rare occasions, the terms can stretch for longer, even indefinitely, although an infinite term is hard to defend as reasonable. 

In entertainment, most NDAs will have terms of one or two years, since many NDAs become null and void the second the production is released to the public. However, there may be scenarios where the terms of an NDA are longer or shorter, covering only a matter of months, or in the case of carefully planned out long-term campaigns (looking at you, Marvel), several more years.

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While NDAs are fairly standard in the entertainment industry, there may be some times when you might not want to sign one. Always read the agreement in order to make sure you are comfortable with all of its terms before signing. And if you're unsure of what something means, always consult with your agent or an attorney before signing.

If you choose not to sign an NDA, understand that the cost of that decision could be your ability to work on that production. While some terms of an NDA might be negotiable, it's probably a dealbreaker to refuse to sign it entirely. After all, if confidentiality was optional, productions probably wouldn't ask for it in the first place. However, even if it costs you a job, there are some circumstances under which you should seriously consider not signing an NDA. 

In August 2023, the National Labor Relations Board (NLRB) issued a decision intended to keep employer policies from infringing on employee rights under Section 7 of the National Labor Relations Act (NLRA). When it comes to NDAs, this means that predatory, overreaching documents like the ones producer and convicted sex offender Harvey Weinstein used to silence his victims are no longer legally enforceable, and will not hold up in court. Of course, there may still be other reasons that signing an NDA may not be in a performer's best interest, but fortunately, being silenced from speaking out against unlawful acts is no longer one of them. 

NDA red flags

• Unclear definitions. If the NDA fails to precisely specify what information is deemed confidential, or defines it so broadly that it's impossible to reasonably know whether or not something is confidential, you may not want to ask for clarification before you sign. After all, how can you know if you're complying with your NDA if you don't even know what information you're supposed to keep secret?
• Unlimited liability. If there's no calculation for maximum damages included in your NDA, then there's no limit to the amount of money you could be held liable for. It's in your best interest to ensure that a reasonable cap on damages be included in your agreement. 
• Indefinite terms. In most instances, you probably don't want to agree to terms that last until the end of time. If you are handed an NDA that does not have a clearly defined expiration date, it may be time to head back to the negotiation table. 
• No termination clause. While everything may seem great when you sign, situations can change, and there may be circumstances under which you'd want to be released from your NDA. A termination clause gives you a way out, provided both sides agree. Signing without one could lock you in with no recourse, regardless of what extenuating circumstances may arise.
• Violation of your rights. If you are given an NDA that contains language that would prohibit you from reporting abuse or criminal activity, run. While these documents would likely not hold up in court, it's probably in your best interest to not wind up in a spot where you'd have to fight it in the first place.

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Once you've signed an NDA, you are legally bound not to divulge the confidential information defined in your agreement. If you go against the terms of your contract by sharing that information anyway, there could be significant consequences. 

Legally, it means you've broken a contract, and could be held liable for the damages stipulated in your NDA. This could amount to a significant amount of money, especially if your NDA does not include a reasonable calculation to determine damages or a cap on what those damages might be.

Beyond that, breaking your NDA could seriously affect your relationships within the industry. People from that production may not want to work with you again if they don't believe you to be trustworthy. But even beyond that, word could get around that you broke your contract, which could affect your ability to get work on other projects as well. Once you have a reputation as a person who can't be trusted with confidential information, it can be very difficult or even impossible to recover. So unless you have an extremely good reason to break your NDA (as in the case of the women who broke their NDAs to expose Weinstein), the safest bet is to abide by its terms until it expires. 

And if you—or your rep and/or lawyer—feel that might not be possible or advisable, then you probably shouldn't sign in the first place.

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