The Misuse of Non‑disclosure Agreements Act prohibits parties from using written confidentiality or non‑disparagement clauses to conceal allegations or incidents of violence, harassment or discrimination, while allowing narrowly circumscribed, survivor‑driven confidentiality arrangements. It covers settlement agreements generally — including employment and severance contracts — and applies to agreements made before, on or after the Act comes into force.
The bill sets enforceability conditions (independent legal advice, absence of undue influence, plain language, limited duration, and an option to later waive confidentiality), carves out permitted communications (police, lawyers, health and victim‑support professionals, and specified public bodies), bars government employers and public institutions from initiating or litigating NDAs except in tightly defined circumstances, and creates a summary offence with fines of $5,000–$50,000 for entering prohibited agreements. The measure is intended to shift settlement practices toward survivor autonomy and transparency, with consequential compliance and liability implications for employers, lawyers, and public institutions.
At a Glance
What It Does
Bans NDAs that have the effect or purpose of concealing violence, harassment or discrimination, but allows enforceable confidentiality only when the relevant person expressly requests it and strict conditions are met (legal advice, no undue influence, plain language, time limit). It declares non‑compliant NDAs void and severable and preserves reporting rights to police and statutory agencies.
Who It Affects
Employers, school boards, Crown corporations, publicly funded universities and colleges, lawyers who draft settlements, insurers, workplace safety and human rights investigators, and survivors of workplace and institutional violence — including women, 2SLGBTQIA+ and racialized people disproportionately affected by NDAs.
Why It Matters
It changes settlement design and risk allocation: confidentiality clauses that were routine may be unenforceable, public institutions face new procedural requirements, and entering prohibited NDAs can trigger criminal fines. The law raises immediate compliance questions about past settlements, independent legal advice procedures, and how institutions will document voluntariness.
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What This Bill Actually Does
The Act treats non‑disclosure provisions in any settlement that conceal allegations or incidents of violence, harassment or discrimination as presumptively prohibited, but it lets a survivor keep confidentiality if they explicitly want it and certain safeguards are met. Those safeguards include giving the survivor a real opportunity for independent legal advice, ensuring no undue pressure influenced the decision, keeping the clause limited in time, writing it plainly and offering the survivor an option later to waive their confidentiality.
If those conditions are absent, the NDA is void; but the rest of the settlement remains effective.
The bill defines key terms broadly: “non‑disclosure agreement” includes non‑disparagement clauses that function to conceal; “party responsible” reaches entities with a legal obligation to prevent the wrongdoing (for example, employers or institutions); and “relevant person” is the survivor or complainant. The Act expressly preserves the right to report to police, to participate in human rights or occupational health and safety procedures, and to make protected public interest disclosures.
It also lists a wide set of persons and services with whom the survivor may communicate regardless of an NDA — lawyers, health professionals, victim services, elders, the Ombudsman and others prescribed by regulation.Public sector actors face specific limits: government departments, Crown corporations and publicly funded universities and colleges may not enter an NDA unless the survivor makes a voluntary written request after having the opportunity for independent legal advice, and those institutions are barred from litigating NDAs against survivors. The Act permits victim‑protective confidentiality clauses (to shield a survivor’s identity) and preserves the ability to keep settlement amounts confidential.
The Governor in Council can make regulations to clarify definitions and prescribe additional exceptions, and the Act takes effect six months after Royal Assent unless proclaimed earlier.
The Five Things You Need to Know
Section 6 creates a near‑blanket prohibition: a party responsible or a person who committed or is alleged to have committed misconduct cannot enter an NDA that has the effect or purpose of concealing violence, harassment or discrimination.
Section 7 allows NDAs only when the relevant person expressly requests confidentiality and the NDA meets enumerated enforceability conditions: reasonable opportunity for independent legal advice, no undue influence, plain language and a set, limited duration plus an option to later waive confidentiality.
Section 5 applies the Act to NDAs made before, on or after the Act’s coming into force, meaning pre‑existing agreements may be void if they conceal covered misconduct and fail the new criteria.
Section 14 bars government departments, Crown corporations and publicly funded universities/colleges from entering NDAs unless a relevant person makes a specific voluntary written request after opportunity for independent legal advice, and also prohibits those bodies from litigating NDAs against survivors.
Section 17 creates a summary offence for entering into a prohibited NDA after the Act comes into force, punishable by a fine of $5,000 to $50,000; Section 9 makes unenforceable NDAs severable so other settlement terms survive.
Section-by-Section Breakdown
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Purpose statement framing survivor‑centred objectives
The Act’s purpose focuses on stopping NDAs used to conceal violence, harassment and discrimination and acknowledges that NDAs disproportionately harm women, 2SLGBTQIA+ and racialized people. This language signals interpretive priorities: courts and administrators will weigh survivor protection and systemic transparency when construing ambiguous provisions. It also explicitly links NDAs to systemic abuse in workplaces and public institutions, which informs later provisions aimed at public bodies.
Definitions that broaden the reach of the prohibition
Section 3 provides expansive definitions: non‑disclosure agreement includes non‑disparagement clauses with the effect of concealing misconduct; violence is defined to include coercion and discrimination; party responsible covers entities legally obligated to prevent the wrongdoing. These definitions pull settlement clauses from many contexts (employment, severance, institutional settlements) into the Act’s scope and reduce the possibility that a litigant can argue a narrow contractual meaning to avoid the ban.
Retroactivity: applies to pre‑existing agreements
The Act applies to NDAs made before, on or after its coming into force. Practically, this raises questions about the status of long‑standing confidentiality clauses: if a past NDA conceals covered misconduct and fails the Act’s enforceability conditions, it will be void. That creates immediate compliance and disclosure dilemmas for institutions and employers with legacy settlements.
General prohibition and narrow carve‑out with enforceability tests
Section 6 broadly prohibits entering NDAs intended to conceal covered misconduct. Section 7 creates the only pathway for enforceability: an express, voluntary request from the survivor plus strict conditions — independent legal advice, absence of undue influence, no adverse effect on third‑party health or public interest, a plain‑language label, a time limit and an option to waive confidentiality later. The bill leaves some terms open (for example, what counts as a ‘reasonable opportunity’ for advice or a permissible duration), placing emphasis on process and documented voluntariness.
Protections for investigations and reporting; interaction with other laws
The Act bars NDAs intended to stop lawful investigations and affirms that NDAs cannot prevent filing human rights complaints, reporting hazards under the Occupational Health and Safety Act, cooperating with investigations, or reporting to police. It also states NDAs must comply with the Criminal Code and preserves protected disclosure rights under federal public interest disclosure laws. These provisions prioritize statutory reporting and investigatory functions over contractual confidentiality.
Enumerated permitted communications and artistic expression carve‑outs
Section 10 lists specific exceptions: survivors may communicate regardless of an NDA with police, lawyers, specified health professionals, victim services, the Ombudsman, approved supporters and others prescribed by regulation. It also allows anonymous artistic expression so long as it does not identify parties or NDA terms. These carve‑outs reduce inadvertent gagging of support and help‑seeking while still limiting reputational attacks on named individuals.
Special rules for government entities and public institutions
Government departments, Crown corporations and publicly funded universities and colleges face heightened constraints: they may not enter NDAs unless the survivor makes a written, voluntary request after having had an opportunity for independent legal advice, and they may not litigate NDAs against survivors. This puts procedural guardrails on public settlements and eliminates a common enforcement tactic against survivors who speak publicly.
Survivor confidentiality options, monetary confidentiality, and penalties
The Act preserves the ability to include victim‑protective confidentiality (to hide identity) and allows confidentiality for settlement amounts, but refuses to let NDAs block statutory reporting. Section 17 makes entering a prohibited NDA after the Act is in force a summary offence with a $5,000–$50,000 fine. The combination of civil invalidity and criminal sanction is designed to encourage compliance, but enforcement depends on prosecutions or civil challenges.
Regulatory power and commencement
The Governor in Council may define undefined terms and prescribe classes of persons exempted from prohibitions, and make other regulations necessary to implement the Act. The Act comes into force six months after Royal Assent unless proclaimed earlier, which gives time for institutions to adjust procedures and for regulations to be developed.
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Explore this topic in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Survivors and complainants of sexual, gender‑based or workplace violence — the Act reduces enforceable secrecy, strengthens the ability to report and participate in investigations, and limits coercive settlements that trade silence for compensation.
- Marginalized groups (women, 2SLGBTQIA+, racialized persons) — by naming populations disproportionately affected, the law aims to correct systemic imbalances and reduce the routine silencing that has particularly harmed these groups.
- Workplace safety and human rights investigators — clearer statutory priority for disclosures means agencies will have improved access to evidence and fewer contractual hurdles when investigating systemic problems.
- Civil society and the public interest — the law curtails private secrecy that can conceal institutional misconduct, making systemic abuse easier to surface through reporting and research.
- Legal and support professionals focused on victim services — the explicit carve‑outs for communications with specified professionals reduce uncertainty about client contacts and help channels for support remain open.
Who Bears the Cost
- Employers, educational institutions and public bodies — they must revise settlement templates and processes, document voluntariness and legal advice, and may face increased litigation to determine enforceability of legacy agreements.
- In‑house and private practice lawyers drafting settlements — compliance will require more thorough independent‑advice processes and documentation, increasing transactional cost and potential professional exposure if advice is cursory.
- Public institutions and Crown corporations — the prohibition on litigating NDAs removes a common enforcement tool and may force alternative risk management strategies (e.g., non‑litigious confidentiality mechanisms or larger settlements).
- Alleged perpetrators and entities seeking confidentiality — individuals and organizations that relied on NDAs to protect reputations will see reduced ability to secure absolute secrecy and face criminal fines if they enter prohibited NDAs after the Act commences.
- Insurers and benefit administrators — increased disclosure risk and potential for reopened matters from voided NDAs could raise claims costs and require policy redesign.
Key Issues
The Core Tension
The central dilemma is balancing survivor autonomy and public transparency against the legitimate privacy and settlement interests of survivors and institutions: the Act protects survivors from being coerced into silence and opens pathways for systemic accountability, but it also restricts the ability of survivors and institutions to negotiate confidential resolutions, raises retroactive uncertainty for past settlements, and substitutes process‑based safeguards for the finality that parties often seek in dispute resolution.
The Act leaves several practical uncertainties that will shape its real‑world effect. Key undefined standards — what counts as a ‘reasonable opportunity’ for independent legal advice, what qualifies as ‘undue attempts to influence’, and how long a ‘set and limited duration’ may be — are ripe for litigation and for regulatory clarification.
Those gaps create a period of legal uncertainty: employers and institutions may face costly defensive litigation or choose to over‑compensate survivors to avoid risk.
Retroactivity heightens that uncertainty. Applying the law to pre‑existing NDAs invites challenges over settled expectations: institutions may be required to disclose conduct that was previously confidential, but courts will need to determine whether older agreements are void under the Act.
Enforcement is also ambiguous. The Act creates a summary offence with fines, but does not identify an enforcing agency or a routine administrative process; criminal penalties may therefore be sporadic, leaving civil invalidation and private litigation as the main enforcement mechanisms.
Finally, the prohibition on litigating NDAs by public bodies advances transparency but could unintentionally constrain legitimate institutional interests in safeguarding confidential personal information unless procedures for victim‑protective confidentiality are robust and clear.
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