AB 1652 adds Section 11000.3 to the Government Code to prohibit elective or appointive officers of California state agencies, when acting in their official capacity, from entering into or requesting nondisclosure agreements (NDAs) that relate to the drafting, negotiation, or discussion of proposed regulations or legislation. The bill also declares any such NDA executed or requested after the law’s effective date void and unenforceable, but preserves NDAs or portions of NDAs that solely protect trade secrets, private financial information, or proprietary information.
For compliance officers and agency counsel, the bill narrows the set of confidentiality tools available during rulemaking and pre-rule discussions and shifts the legal baseline: NDAs tied to substantive regulatory language or policy bargaining will no longer be an enforceable way to silence participants. Agencies, outside counsel, and regulated entities will need to revisit standard meeting protocols, contract templates, and information-handling procedures to avoid relying on invalid NDAs while still protecting legitimate confidential business data under the statute’s exception.
At a Glance
What It Does
The bill forbids elected or appointed state-agency officers, acting in their official roles, from entering into or asking others to enter into NDAs that relate to drafting, negotiating, or discussing proposed regulations or legislation, and declares post‑effective‑date NDAs on those subjects void and unenforceable. It preserves confidentiality only where an NDA prevents disclosure solely of trade secrets, private financial information, or proprietary information.
Who It Affects
Directly affects appointive and elective officers of state agencies (agency heads, deputies, commissioners), agency legal teams, external stakeholders who meet with agencies during rulemaking (industry groups, advocates, contractors), and private counsel who draft confidentiality agreements for those interactions.
Why It Matters
This creates a statutory transparency floor for administrative rulemaking and pre-rule dialogues, reducing the ability to contractually suppress discussion about policy content while still allowing protection for narrowly defined confidential business information. The change will ripple into agency SOPs, contract language, and litigation risk around enforceability of existing NDAs.
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What This Bill Actually Does
AB 1652 targets the use of nondisclosure agreements when state-agency officials engage in the core work of writing or discussing proposed regulations or drafting legislative language. It does two related things: (1) it bans an elective or appointive officer, acting in an official capacity, from entering into or requesting an NDA that relates to drafting, negotiation, or discussion of proposed regulatory or legislative text; and (2) it makes any such NDA entered into or requested after the law takes effect void and unenforceable.
The statute includes short, plain definitions for “discussion,” “drafting,” and “negotiation,” anchoring the prohibition to communications aimed at reaching decisions, developing language, or resolving disputes about proposed rules or laws.
The bill is not an absolute bar to protecting confidential business information. It carves out an exception for NDAs — or portions of NDAs — that prevent only the disclosure of trade secrets, private financial information, or proprietary information.
That means an NDA that is narrowly tailored to cover only those categories can remain in force; an NDA that broadly bars disclosure of the substance of a regulatory discussion cannot. Practically, agencies and participants must separate substantive policy communications from legitimately protected business data, and where necessary rely on targeted confidentiality language that fits the statutory exception.Operationally, the statute applies to elective and appointive officers acting in their official capacity, which captures typical agency leaders and officials who represent the agency in rulemaking.
It does not specify criminal penalties or an enforcement scheme; its primary operative effect is to render covered NDAs void and unenforceable, which creates a civil-law consequence and opens the door to declaratory relief or defense arguments if a party tries to enforce such an agreement. Because the bill changes the enforceability of NDAs rather than prescribing administrative sanctions, implementation will largely be driven by agencies updating internal policies, contract templates, and training for staff and outside counsel to avoid reliance on prohibited confidentiality provisions.Finally, the statute’s definitions and the “only” language in the exception will be focal points in disputes.
Parties negotiating protections will need to be explicit about what is being withheld and why, and agencies will need to adopt document-handling practices (for example, segmentation of confidential disclosures and redaction protocols) to protect exempted information while keeping policy discussions free of enforceable secrecy agreements.
The Five Things You Need to Know
The bill adds Section 11000.3 to the Government Code and applies to elective or appointive officers of state agencies acting in their official capacity.
It prohibits entering into or requesting NDAs that relate to the drafting, negotiation, or discussion of proposed regulations or legislation.
Any NDA concerning those subjects entered or requested after the law’s effective date is void and unenforceable, subject to the statute’s exception.
The law preserves NDAs (or portions of NDAs) that prevent only the disclosure of trade secrets, private financial information, or proprietary information.
The text includes statutory definitions of “discussion,” “drafting,” and “negotiation,” but does not create criminal penalties or an express administrative enforcement mechanism.
Section-by-Section Breakdown
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Ban on NDAs in policy drafting, negotiation, and discussion
Subdivision (a) prohibits an elective or appointive officer of a state agency, when acting in their official capacity, from entering into or requesting an NDA that relates to drafting, negotiation, or discussion of a proposed regulation or legislation. This provision focuses the prohibition on official acts by agency leaders and makes it unlawful—statutorily—for those officers to seek contractual secrecy around substantive policy communications.
Voidability of post-effective-date NDAs
Subdivision (b) declares any NDA relating to drafting, negotiation, or discussion of proposed regulations or legislation entered into or requested by an affected officer after the statute takes effect to be void and unenforceable. The practical legal consequence is that parties cannot rely on those agreements to prevent disclosure or to enforce silence; the clause alters the enforceability landscape rather than assigning direct penalties for violations.
Narrow confidentiality exception for business secrets
Subdivision (c) creates the exception and its limits: officers may still enter into or request NDAs that prevent only disclosure of trade secrets, private financial information, or proprietary information, and portions of NDAs with that narrow scope remain enforceable. The statute thus separates substantive policy secrecy (disallowed) from standard protections of confidential business data (allowed), but anchors enforceability to an arguably strict ‘only’ standard that will shape drafting choices.
Definitions: discussion, drafting, negotiation
Subdivision (d) defines key terms. “Discussion” covers communications aimed at reaching a decision; “drafting” covers developing language; and “negotiation” covers communications between opposing interests to resolve disputes about proposed rules or legislation. These definitions narrow the statute’s reach to communications tied to decision-making and dispute resolution about regulatory or legislative content, which helps both agencies and stakeholders determine when the prohibition applies.
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Who Benefits
- Members of the public and transparency advocates — gain broader access to previously contractually shielded policy discussions, improving public oversight of rulemaking.
- Journalists and watchdog organizations — can more readily publish or request materials from meetings where NDAs would previously have blocked disclosure of substantive regulatory discussions.
- Other regulated entities and competing stakeholders — benefit from a level playing field when policy is negotiated, because private NDAs cannot be used to secure advantages in drafting regulatory terms.
Who Bears the Cost
- State agency leaders and legal teams — must revise standard confidentiality forms, retrain staff, and redesign pre-rulemaking engagement processes to avoid prohibited NDAs, increasing administrative burden.
- Private companies and trade associations — lose a common contractual mechanism to protect negotiation strategies or broad confidentiality about substantive policy positions and may need to rely on narrower trade‑secret protections or statutory exemptions.
- Outside counsel and contractors who prepare NDAs — face increased drafting complexity and potential litigation risk when determining whether language improperly restrains policy discussion and therefore is void.
Key Issues
The Core Tension
The bill pits two legitimate aims against each other: increasing transparency in rulemaking and preserving the ability of private parties to protect genuinely sensitive business information. Tightening transparency reduces the risk that policy is negotiated behind closed contractual walls, but it also risks discouraging stakeholders from supplying candid technical or financial data unless agencies and parties develop more granular confidentiality practices that the statute leaves largely undefined.
The statute’s operative effect—voiding NDAs tied to drafting, negotiation, or discussion—creates implementation questions that the bill does not resolve. First, the boundary between a legitimate trade-secret or private-financial disclosure and a policy discussion can be porous: many stakeholders disclose proprietary analyses to influence regulatory design.
Agencies and private parties will have to segregate confidential data from substantive exchanges or rely on narrowly worded confidentiality clauses that survive judicial scrutiny. That segmentation imposes transaction costs and requires clear internal protocols and recordkeeping.
Second, the bill’s enforcement mechanics are indirect. By making covered NDAs void and unenforceable, the statute prevents contractual enforcement but does not specify remedies, administrative penalties, or a public‑records process for challenged disclosures.
Disputes will likely be litigated as invalidity defenses or declaratory-judgment actions, increasing litigation risk and uncertainty. Finally, the definitions and the statutory qualifier that an NDA must “prevent only” disclosure of specified categories will generate interpretive fights: opposing parties will contest whether a clause is truly limited to trade secrets or whether it effectively muzzles policy content, and courts will be asked to draw fine lines between the two.
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