How do I know if an NDA is unenforceable?

An NDA is likely unenforceable if it is overly broad, lacks a specific duration, restricts trade secrets that are already public, or functions as a de facto non-compete agreement in states where those are banned.

Can an NDA prevent me from reporting illegal activity?

No. Under federal law (such as the Defend Trade Secrets Act) and many state whistleblower protection laws, NDAs cannot prohibit employees from reporting illegal acts or cooperating with government investigations.

A TermScore is an AI-generated risk rating from 0 to 100 that evaluates the fairness and risk level of any legal document. A score of 86-100 means the contract is highly favorable, while 0-30 indicates dangerous terms you should walk away from.

What types of documents can TermScore analyze?

TermScore analyzes any legal document including freelance contracts, employment agreements, residential leases, NDAs, brand sponsorship deals, SaaS vendor agreements, and rental applications. Upload PDFs, Word documents, or images.

How much does TermScore cost?

TermScore offers a free plan with 3 scores per month. The Team plan is $15/month for 30 scores, and the Professional plan is $50/month for 500 scores with team collaboration features.

Is my document data secure?

Yes. Documents are processed in memory and analysis results are stored encrypted. TermScore never shares your document data with third parties and you can delete your data at any time from your dashboard.

How to determine if an employment NDA conflicts with state labor laws

How to Determine if an Employment NDA Conflicts with State Labor Laws

To determine if an employment NDA conflicts with state labor laws, compare the agreement’s scope against your state’s specific statutes regarding restrictive covenants. If the NDA restricts your ability to work in your profession, lacks a reasonable time limit, or prevents reporting illegal conduct, it is likely unenforceable.

The Core Conflict: NDAs vs. Non-Competes

The most common legal conflict arises when an employer uses an NDA to effectively function as a non-compete agreement. While NDAs are generally legal, courts will strike them down if they are so broad that they prevent an employee from using their general skills and knowledge in a new role.

Red Flags of Overly Broad NDAs

Overly broad definitions of 'Confidential Information': If the definition includes information that is publicly available or part of your general professional skill set.
Lack of temporal limit: NDAs that claim to last 'in perpetuity' are frequently rejected by courts, especially in states like California.
Geographic restrictions: While rare in pure NDAs, any mention of geographic limitations suggests the contract is actually a non-compete in disguise.
'De Facto' Non-Competes: Provisions that prohibit you from working for any 'competitor' or 'client' of the employer regardless of whether trade secrets are involved.

Key takeaway: If your NDA prevents you from using your 'general knowledge, skill, and experience' acquired during employment, it is likely an illegal restraint on trade.

Action Item: Review your NDA for the definition of 'Confidential Information.' If it includes 'all information learned during employment,' it is likely unenforceable.

State-Specific Statutory Requirements

Labor laws vary significantly by jurisdiction. You must check your state’s specific statutes, as some states have passed aggressive legislation to protect worker mobility.

State	Legal Stance on Restrictive Covenants
California	Strictly prohibits non-competes; NDAs cannot be used to restrict trade.
New York	Requires 'reasonableness' in scope, duration, and geographic area.
Washington	Voids non-competes for employees earning below a specific salary threshold.
Illinois	Requires specific 'consideration' and minimum salary thresholds for enforceability.

The California Standard

California Business and Professions Code Section 16600 is the gold standard for employee protection. In California, any contract that restrains anyone from engaging in a lawful profession is void. If an NDA is drafted to prevent you from using your professional expertise, it will be invalidated regardless of how it is labeled.

Action Item: If you are in a state with strong labor protections, cross-reference your NDA clauses against the state’s specific labor code sections regarding 'restraint of trade.'

Step-by-Step Audit Process

Identify the 'Consideration': Determine if you received something of value (e.g., a signing bonus, promotion, or continued employment) in exchange for signing the NDA.
Analyze the Scope: Does the NDA restrict specific trade secrets (legal) or your general ability to perform your job duties (likely illegal)?
Check for Whistleblower Carve-outs: Ensure the contract explicitly states that you are permitted to report illegal activity to government agencies.
Evaluate the Duration: Does the restriction have a sunset clause? If it lasts forever, it is likely unreasonable.

Key takeaway: Always look for a 'savings clause' or 'severability clause' which allows a court to strike out only the illegal parts of the contract rather than the entire agreement.

Action Item: Create a list of the specific 'Confidential Information' categories in your contract and compare them against your daily job tasks. If they overlap 100%, the NDA is likely overreaching.

The Role of Federal Law

Federal statutes often override state-level NDA provisions. The Defend Trade Secrets Act (DTSA) provides immunity for individuals who disclose trade secrets to government officials for the purpose of reporting a violation of law. Any NDA that attempts to waive this right is void as a matter of public policy.

How TermScore Simplifies Compliance

Manually auditing an NDA against complex state labor laws is time-consuming and prone to human error. TermScore uses advanced AI to instantly scan your employment contracts, flagging clauses that conflict with state-specific regulations and highlighting overly broad definitions that could jeopardize your career mobility. By providing an objective analysis of your legal risks, TermScore empowers you to negotiate with confidence and ensure your agreements remain within the bounds of the law.