Celebrities, Romantic Relationships, and NDA
Non-Disclosure Agreements (“NDAs”) are typically used to facilitate business transactions and the transfer of sensitive trade secret or proprietary information. Although NDAs may be rare between persons involved in romantic relationships, they are becoming increasingly popular among celebrity couples. A recent complaint filed by Erica Herman, a former employee and former girlfriend of Tiger Woods, demonstrates the complications that may arise from a relationship-based NDA.
In October 2022, Herman sued a trust controlled by Woods in a Florida Circuit Court, alleging that agents of the trust locked her out of her residence, removed her belongings, misappropriated over $40,000 that belonged to her, and made defamatory allegations about how she obtained the money. In December, lawyers representing Woods argued that Herman’s complaint was invalid since the NDA she had signed mandated that their disputes be handled confidentially.
In response, Herman filed a new complaint seeking a declaration that the NDA is unenforceable. Herman alleges not only that she was unsure of what information from her own life she could discuss, but also that the NDA she initially signed should be unenforceable under the Speak Out Act.
NDAs in Florida
Under Florida Statute 542.335, NDAs, as restrictive covenants, are enforceable so long as there is a legitimate business interest to be protected. If the party asserting the NDA can show that it is reasonably necessary, the opposing party must then demonstrate that it is “overbroad, overlong, or otherwise not reasonably necessary to protect the business interest.” The asserting party must also define and prove its legitimate business interest(s), including “valuable confidential business or professional information that otherwise does not qualify as trade secrets.”
An NDA that an employer wishes to enforce against a former employee may also be subject to a time limit of 6 months to 2 years as long as it does not involve the sale of (a) assets of a business or professional practice, (b) the shares of a corporation, (c) a partnership interest, (d) a limited liability company membership, or (e) an equity interest, of any other type, in a business or professional practice.
Florida law also considers geographic and trade areas when determining whether an NDA is enforceable.
Sexual Misconduct Laws and the Speak Out Act
Although Herman has not made specific claims of sexual harassment or assault, her reliance on the federal Speak Out Act suggests that she may look to sexual misconduct-related exceptions in order to have her NDA rendered unenforceable by the court.
- Florida Senate Bill 866
- As of October 2019, Florida Senate Bill 866 has prohibited employers from requiring an employee to sign an NDA that prohibits the disclosure of instances of sexual harassment or sexual assault. The bill also prohibits employers from firing employees for disclosing such acts.
- The Speak Out Act
- Heavily influenced by the MeToo movement, The Speak Out Act was introduced by U.S. Senator Kirsten Gillibrand and signed into law by President Biden in December 2022. Under the Speak Out Act, nondisclosure and non-disparagement clauses cannot be enforced if a dispute involving sexual assault or harassment in violation of federal, tribal, or state law arises after the clause is signed. In addition, NDAs cannot force employees to keep confidential about future sexual assault or harassment claims.One particularly important element to the Speak Out Act is that it applies to NDAs signed before sexual assault or harassment incidents arise. It does not apply to NDAs signed after such incidents and is not retroactive for any NDAs signed before the date the Act was signed.
Conclusion
The fate of Herman’s complaint will likely depend on whether any alleged instance of sexual harassment or assault has occurred before or after the NDA was signed. If Herman can prove that she signed the NDA as a condition of her employment under Woods and that sexual misconduct occurred after the agreement took effect, Florida Senate Bill 866 and the federal Speak Out Act may render the NDA unenforceable.
For those who believe that the NDA they signed may be unenforceable, contacting an experienced attorney may save significant amounts of both time and money during legal disputes.
Contributions to this blog by Joseph Whitfield Ford IV.
