Season 3 Episode 18: The Truth behind NDAs and Shia LaBeouf & FKA Twigs settlement explained

Before we get into the celebrity case, let's establish the basics.

An NDA is a contract in which one or more party agrees to keep certain information confidential or restrict how that information may be disclosed.

You see these agreements everywhere in the entertainment industry.

A celebrity may sign one during a settlement.

A production company may require one before giving someone access to an unreleased film.

A record label may use the confidentiality provisions in negotiations.

A talent manager, publicist, personal assistant, or executive may be required to protect private business information.

Influencers and content creators encounter NDAs when they receive advance access to products, collaborate with brands, participate in private negotiations, or settle disputes.

But here's the first misconception I want to clear up.

An NDA is not automatically illegal just because it restricts speech, and it's not automatically enforceable just because someone signed it.

Both statements can be true.

The law generally recognizes that people and businesses have legitimate reasons to protect confidential information.

For example, a company may need to protect trade secrets, unreleased music, private financial records, confidential business strategies, or the amount paid in a settlement.

But the law also recognizes that certain types of information cannot necessarily be buried behind a private agreement.

Public policy matters.

Statutes matter.

The language of the agreement matters, and the circumstances surrounding the agreement matter.

Think about three different scenarios.

Scenario number one, a music producer signs an NDA promising not to leak an unreleased album before its official release.

This is a conventional use of confidentiality.

If the agreement is properly, properly drafted and otherwise lawful, the producer could face consequences for leaking the album.

Scenario number two, a departm- departing executive agrees not to disclose a company's legitimate trade secrets.

Again, that may be an appropriate and enforceable restriction.

Scenario three, someone involved in a settlement is asked to agree never to disclose factual information concerning alleged sexual assault, even where a statute expres- expressly prohibits that kind of confidentiality restriction.

Now we have a very different legal situation.

Before we get into the celebrity case, let's establish the basics.

An NDA is a contract in which one or more party agrees to keep certain information confidential or restrict how that information may be disclosed.

You see these agreements everywhere in the entertainment industry.

A celebrity may sign one during a settlement.

A production company may require one before giving someone access to an unreleased film.

A record label may use the confidentiality provisions in negotiations.

A talent manager, publicist, personal assistant, or executive may be required to protect private business information.

Influencers and content creators encounter NDAs when they receive advance access to products, collaborate with brands, participate in private negotiations, or settle disputes.

But here's the first misconception I want to clear up.

An NDA is not automatically illegal just because it restricts speech, and it's not automatically enforceable just because someone signed it.

Both statements can be true.

The law generally recognizes that people and businesses have legitimate reasons to protect confidential information.

For example, a company may need to protect trade secrets, unreleased music, private financial records, confidential business strategies, or the amount paid in a settlement.

But the law also recognizes that certain types of information cannot necessarily be buried behind a private agreement.

Public policy matters.

Statutes matter.

The language of the agreement matters, and the circumstances surrounding the agreement matter.

Think about three different scenarios.

Scenario number one, a music producer signs an NDA promising not to leak an unreleased album before its official release.

This is a conventional use of confidentiality.

If the agreement is properly, properly drafted and otherwise lawful, the producer could face consequences for leaking the album.

Scenario number two, a departm- departing executive agrees not to disclose a company's legitimate trade secrets.

Again, that may be an appropriate and enforceable restriction.

Scenario three, someone involved in a settlement is asked to agree never to disclose factual information concerning alleged sexual assault, even where a statute expres- expressly prohibits that kind of confidentiality restriction.

Now we have a very different legal situation.