Recently Buzzfeed News published a reprint of part of a non-disclosure/non-disparagement agreement between Donald Trump’s campaign and anyone who works or volunteers for it — and it made me wonder just how enforceable it is.
Under New York law, it’s pretty difficult to avoid a prohibition against sharing confidential information. The courts generally support the notion that if someone has information that’s confidential and proprietary to a company, the company should be able to protect itself, with very few exceptions. So, on its face, this agreement might be “fine.”
The agreement obtained by Buzzfeed, as partially published, does not include a non-competition clause. Rather, it’s about confidentiality and non-disparagement, sometimes mixed with a discussion of trade secrets — but what this agreement restricts probably would not amount to a trade secret.
It also has a very broad definition of what is “confidential,” and that’s what is most curious about it.
According to Mr. Trump, confidential information means all information of private, proprietary nature that he “insists remain private or confidential…” Under this definition, anything under the sun may be deemed private or confidential. That might not be enforceable, because no one can predict what an individual is going to do or say next.
As we delve deeper into the document (as limited by what Buzzfeed provided), we get a glimpse as to what “confidential” means at Trump campaign headquarters:
…any information with respect to the personal life, the political affairs, and the business affairs of Trump or any of his family members.
Anything. What this is missing, and might make this agreement unenforceable, is that most other agreements define “confidential information” as having three exceptions; information that:
- is known prior to working with the disclosing party (here, the employer).
- is publicly available; or
- becomes publicly available without to the misconduct of any third party.
Without those exceptions, this contract attempts to be a gag order against anyone saying anything about Mr. Trump or anyone affiliated with him.
There is also a non-disparagement clause. That’s usually reciprocal. That is, non-disparagement clauses generally are intended to say, “We won’t say bad things about you as an employee so you can get re-employed. So, you aren’t going to say bad things about us from what you know from working here.” That’s to prevent the employee from discouraging people from working for or doing business with the employer, or the employer from being held liable for defaming the ex-employee. In contrast, Trump’s document is a little more one-sided:
During the term of service you promise and agree not to demean or disparage the company, Trump, or any Trump Company, or any family member, or asset, or any product or service of them.
The coup de grâce of this form agreement is one that will certainly stand the test of time. Literally.
During the term of your service and at all times thereafter, you hereby promise and agree not to demean or disparage the company, or Trump.
Non-disparagement is pretty standard in the context of an employment termination agreement — but pretty unusual in an agreement contemplating the commencement of employment. Anticipating the need to prevent disparagement of Trump or his organization or his family, from the moment the employee, consultant or intern steps into the door, is a lot like saying an election is rigged prior to Election Day.
Whether a court would deem Trump to have been damaged by a release of something he considers confidential is questionable. Or whether leaks from his office could hurt his reputation is also unclear. But from the portion of the agreement that’s been reproduced, any contractual penalty for breaching these covenants is also unclear. Generally, negotiated agreements exclude liability for any consequential or incidental damages, but probably not in this contract. Without a restriction against such indirect damages, each employee or volunteer at his campaign theoretically could be blamed if Trump loses the election.
But none of this might be what is really going on. Regardless of whether the agreement is enforceable, it seems obvious that Mr. Trump wants to leverage the value of intimidation — that is, to have an in terrorem (“terrifying”) effect on any adversaries, real or imagined, by threatening to enforce a form agreement even if a court wouldn’t honor its provisions. Of course, not everyone is afraid of the Big Bad Wolf. (See, for example, the letter from The New York Times’ attorney in response to Trump’s threatened lawsuit for defamation here.)
Any employee who finds himself or herself leaving a job after being coerced into signing an non-compete, non-disclosure or non-disparagement agreement should contact an attorney. In New York, restrictive covenants are generally not enforceable if they are overly broad in duration, geographic scope, or subject matter and have the effect of preventing someone from making a living. So an attorney who seeks to render an agreement unenforceable might be able to argue that the restrictions, as applied, would prevent the employee from working.
Not working may be fine for some people, but not for most of us.
Mark S. Kaufman
Kaufman & Kahn
747 Third Avenue
New York, NY 10017
Tel. (212) 293-5556
Fax. (212) 355-5009