AB 1370 adds Government Code Section 8923 to restrict how Members of the California Legislature use nondisclosure agreements (NDAs) in the legislative process. It forbids Members, acting in their official capacity, from entering into or asking others to enter into NDAs that cover the drafting, negotiation, or discussion of proposed legislation, and declares such NDAs void and unenforceable when requested or executed after the section’s effective date.
The bill preserves a narrow exception for provisions that prevent only the disclosure of trade secrets, financial information, or proprietary information.
This change aims to close a transparency gap: it prevents private parties or outside actors from using confidentiality clauses to shield the substance of legislative negotiations from public view, while attempting to retain protection for genuinely sensitive commercial data. The statute’s focus on Members acting in their official capacity, plus defined terms for “discussion,” “drafting,” and “negotiation,” creates specific compliance obligations and triggers questions about enforcement, scope, and how parties should structure confidentiality around sensitive inputs.
At a Glance
What It Does
The bill prohibits Members of the Legislature, when acting officially, from entering into or requesting NDAs that cover the drafting, negotiation, or discussion of proposed legislation, and makes such NDAs void and unenforceable if entered into or requested after the statute’s effective date. It preserves an exception limited to clauses that only prevent disclosure of trade secrets, financial, or proprietary information.
Who It Affects
Directly affects Members of the California Legislature and third parties who negotiate legislative text — lobbyists, outside counsel, corporations, trade groups, and consultants who previously relied on NDAs to control disclosure of talks about draft bills. It does not expand coverage to non‑Member legislative employees.
Why It Matters
The bill alters how private parties can shield legislative negotiations, reducing a tool previously used to limit public scrutiny. For compliance teams and counsel, it requires rethinking confidentiality practices around legislative engagement and narrowing NDA language to fit the carve‑out for bona fide trade secrets and financial data.
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What This Bill Actually Does
AB 1370 targets the use of confidentiality agreements in the collaborative but public process of making law. Rather than merely advising transparency, the text creates a categorical rule: Members of the Legislature may not engage others in NDAs that relate to the mechanics of producing legislation — that is, conversations about drafting text, negotiating competing positions, or discussing proposed measures.
The statute doesn’t attempt to micromanage every communication; it draws lines by defining the covered activities and by tying the rule to the Member’s official capacity.
The bill’s practical pivot is twofold. First, it renders unenforceable any NDA requested or entered into by a Member after the provision takes effect, subject to a narrowly written exception.
Second, it allows confidentiality to survive only where an NDA’s restriction is limited strictly to trade secrets, financial information, or proprietary data. That “only” qualifier is important: broad confidentiality clauses that sweep in substantive negotiation or the text of drafts will not be saved by the exception.Definitions in the statute — “discussion,” “drafting,” and “negotiation” — are functional and purpose‑driven: the statute captures communications meant to reach decisions, develop bill language, or resolve competing interests through text changes.
By specifying these terms, the bill pushes parties to be precise about what they seek to keep private and forces carve‑outs to be narrowly tailored. The text also limits its reach to Members acting officially, which leaves open the separate question of whether legislative staff, private consultants operating outside that capacity, or parallel private negotiations fall within the prohibition.Operationally, lawyers and compliance teams will need to revise NDA templates used in interactions with lawmakers, remove or tightly limit confidentiality clauses that touch on bill content, and add explicit carve‑outs for verifiable trade secrets or proprietary financial data.
The statute’s voiding mechanism creates litigation and enforcement risks for NDAs that aren’t carefully drafted; it also raises practical questions about how to document and prove that information falls within the permitted categories when parties claim the trade‑secret exception.
The Five Things You Need to Know
The bill makes it an actionable statutory rule that Members of the Legislature may not enter into or request NDAs that relate to drafting, negotiation, or discussion of proposed legislation.
Any NDA relating to those legislative activities that a Member requests or signs after the law’s effective date is void and unenforceable, unless it meets the narrow exception.
The sole exception preserves confidentiality only for provisions that prevent disclosure of trade secrets, financial information, or proprietary information — the text requires that the NDA ‘prevents only’ those disclosures.
The statute defines key terms: “discussion” is communications to reach a decision on proposed legislation; “drafting” is developing bill language; and “negotiation” covers communications resolving disputes by altering proposed legislative text.
The prohibition applies explicitly to Members acting in their official capacity and does not extend under this section to conduct outside that official role, highlighting a boundary between public duties and private interactions.
Section-by-Section Breakdown
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Legislative findings and purposes
This section states why the Legislature is acting: to preserve public transparency when bills are developed and to acknowledge that NDAs are useful in private disputes but problematic when they shield legislative business. For practitioners, these findings signal the statute’s policy intent — courts will likely read enforcement provisions against that transparency rationale when resolving disputes over ambiguous confidentiality clauses.
Prohibition on entering or requesting NDAs
Creates the primary substantive rule: a Member acting in an official capacity may not enter into, or request that another person enter into, an NDA that relates to drafting, negotiation, or discussion of proposed legislation. Practically, this stops Members from using NDAs as a mechanism to exclude the public or other stakeholders from knowing what occurred during legislative negotiation.
Voidness and unenforceability
States that NDAs covering the listed legislative activities and entered into or requested by a Member after the effective date are void and unenforceable. This is a remedial mechanism rather than a private‑contract rule: it removes contractual remedies that a private party might otherwise rely on to preserve secrecy, creating immediate legal risk for NDAs that sweep in legislative content after the statute takes effect.
Narrow exception for trade secrets and proprietary data
Provides a limited carve‑out: confidentiality provisions that prevent only the disclosure of trade secrets, financial information, or proprietary information remain permissible and enforceable. The singling out of 'only' narrows the exception, meaning mixed or general confidentiality clauses that also capture bill text or negotiation strategy likely fail to qualify.
Definitions and scope limitation to official capacity
Defines “discussion,” “drafting,” and “negotiation” to focus the statute on communications intended to produce or alter legislation, and clarifies the section applies only to Members acting in their official capacity. That scope choice concentrates legal exposure on Member conduct and leaves separate questions about staff, private consultants, or non‑official communications to other law or practice.
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Who Benefits
- Journalists and transparency advocates — the law removes a common contractual barrier that could hide the substance of legislative negotiations, making it easier to access and report on how draft bills were shaped.
- Public interest organizations and smaller advocacy groups — by preventing NDAs that suppress negotiation details, the statute levels the information playing field in legislative discussions, reducing the ability of well‑resourced actors to cloak deal terms.
- Legislative ethics and compliance offices — clearer statutory boundaries simplify investigations into alleged concealment of legislative dealings and reduce reliance on inference when determining whether secrecy has improperly influenced lawmaking.
Who Bears the Cost
- Members of the Legislature — they lose the option to use NDAs as a tool in official legislative negotiations and face enforceability risks or ethics exposure for attempting to impose confidentiality on bill content.
- Private parties, lobbyists, and counsel — firms that used NDAs to protect negotiation posture or draft language must redesign engagement practices and accept greater public disclosure, or narrow NDAs to fit the trade‑secret carve‑out with attendant proof burdens.
- Businesses with legitimately sensitive commercial information — they must segregate discussions about proprietary data from substantive legislative drafting or adopt more granular contractual language, creating administrative burdens and potential litigation over what qualifies as a protected trade secret.
Key Issues
The Core Tension
The central dilemma is transparency versus confidentiality: the law advances public scrutiny of how legislation is made by banning NDAs that can hide negotiations, but it simultaneously constrains the ability of private parties to protect legitimate trade secrets and financial data — and it does so using a narrow legal test (‘prevents only’) that is likely to be litigated and operationally burdensome.
The statute’s promise of transparency collides with practical uncertainty. The requirement that an exception ‘prevents only’ trade secrets, financial, or proprietary information creates a high‑stakes line‑drawing problem: many NDAs mix categories (sensitive commercial data alongside negotiation strategy or draft text), and courts will have to parse whether a clause is narrowly tailored or impermissibly broad.
That parsing invites litigation and transactional friction as parties test the boundaries.
Enforcement is another wrinkle. The bill renders certain NDAs unenforceable and ties liability into the legislative ethics framework, which carries criminal penalties elsewhere in law.
But the statute does not create a detailed civil enforcement mechanism, nor does it specify evidentiary processes for proving that a disclosure qualifies as a protected trade secret or that an NDA was requested by a Member acting in an official capacity. Parties will therefore face uncertainty about who bears litigation costs, how trade‑secret claims are proven in the legislative context, and whether private actors will shift confidentiality to informal channels or to non‑Member intermediaries to avoid the rule.
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