Whether you are being asked to sign one before starting a job, during employment, or as part of a severance package — a Non-Disclosure Agreement is a serious legal document. Here is what it means, whether it is enforceable, and what to watch for before you sign.
What Is an NDA?
A Non-Disclosure Agreement — also called a confidentiality agreement — is a contract that restricts what you can share about an employer, a workplace incident, or a business’s confidential information.
In Ontario workplaces, NDAs appear in three common situations:
- At hiring — protecting trade secrets and proprietary information
- During employment — restricting what employees can share externally
- At termination — silencing employees about workplace incidents, often as a condition of receiving severance
All three are legal. But all three have limits.
Are NDAs Enforceable in Ontario?
Yes — but not always and not without limits.
For an NDA to be enforceable in Ontario it must meet these basic requirements:
Consideration
You must receive something of value in exchange for signing. At hiring, the job itself is consideration. Mid-employment, a raise, promotion, or other benefit is required. At termination, severance pay is the consideration — but it must be fair and above ESA minimums to support a binding release and NDA.
Reasonable scope
The NDA must be reasonable in what it restricts. An agreement that prevents you from ever discussing anything about your former employer — forever — is likely overbroad and unenforceable. Courts look for specific, defined restrictions with reasonable time limits.
Clarity
The language must be clear enough that a reasonable person understands what they are agreeing to. Vague or ambiguous NDAs are interpreted against the party that drafted them — usually the employer.
No unconscionability
If the NDA was signed under duress, with no time to review, or under circumstances so one-sided that enforcing it would be unfair — a court may refuse to enforce it.
NDAs at Termination — The Most Contested Situation
This is where NDAs are most commonly challenged — and most commonly abused.
When an employer offers you a severance package, it almost always comes with a release and an NDA. You are asked to sign away your right to discuss what happened in exchange for money.
This is legal — but the NDA must meet Ontario’s standards. Specifically:
The severance must be genuine. An NDA attached to a package that only meets ESA minimums may not be binding, because the courts require meaningful consideration for a release of common law rights.
You must have time to review it. Presenting an NDA with a 24 or 48 hour deadline and pressuring you to sign is a red flag. You are entitled to reasonable time to seek legal advice.
It cannot cover up illegal conduct. This is the most important limit — and the one Ontario recently strengthened.
Ontario's New NDA Rules — Bill 124 and Workplace Misconduct
Ontario passed legislation specifically restricting the use of NDAs to silence victims of workplace sexual harassment, sexual assault, and discrimination.
Under these rules:
- An NDA cannot prevent a victim from disclosing misconduct to police, a doctor, a lawyer, or a regulatory body
- A victim can unilaterally terminate an NDA related to workplace misconduct if they choose to speak out
- An employer cannot make an NDA a condition of employment or continued employment in relation to a misconduct complaint
If you signed an NDA related to harassment or discrimination and want to know whether you can speak about what happened — get legal advice. The answer may be yes.
What a Confidentiality Agreement Can Legally Cover
A properly drafted NDA in Ontario can restrict:
- Trade secrets and proprietary business information
- Client lists and pricing structures
- Internal processes and product development
- Financial information not publicly available
- The terms of a severance settlement
What an NDA Cannot Legally Do
An NDA cannot:
- Prevent you from reporting criminal conduct to police
- Stop you from filing a complaint with the Ministry of Labour or Human Rights Tribunal
- Silence you from speaking to a lawyer or doctor
- Cover up workplace sexual harassment or assault under Ontario’s new rules
- Prevent you from telling future employers the basic facts of your employment history
Red Flags to Watch For
Before signing any NDA, watch for:
Overly broad language — phrases like “any information relating to the company” with no specific definition. Push for specifics.
No time limit — a confidentiality obligation that lasts forever is often unenforceable. Reasonable time limits are standard in properly drafted agreements.
Covers misconduct — if the NDA asks you to stay silent about harassment, discrimination, or unsafe conditions — Ontario law may give you the right to speak regardless of what you sign.
Pressure to sign quickly — legitimate employers give you reasonable time to review. Pressure is a signal something is being hidden.
No independent legal advice clause — a well-drafted NDA acknowledges your right to seek legal advice before signing. If that clause is missing, that is telling.
How to Write an NDA That Holds Up
For employers drafting NDAs, a legally sound agreement should:
- Define confidential information specifically — not broadly
- Include a reasonable time limit
- Acknowledge the employee’s right to seek legal advice
- Attach meaningful consideration — especially at termination
- Exclude legally protected disclosures — police, regulators, lawyers
- Comply with Ontario’s workplace misconduct NDA restrictions
A template NDA copied from the internet is one of the most common reasons these agreements fail when tested in court.
The bottom line: An NDA is not automatically a cage. Whether you are signing one at the start of a job or at the end of it — understand what it covers, what it cannot cover, and whether the consideration attached to it is meaningful. If you are being asked to sign an NDA that feels like it is silencing something that should not be silenced — get legal advice before you put your name on it.
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