What “Confidential” Means in Employment Law — and What It Doesn’t
Your employer tells you the investigation is “confidential.” Your severance agreement includes a “confidentiality” clause. Your NDA says certain information is “confidential and proprietary.” The word appears everywhere in employment law — and it means something different every time it appears. Understanding the difference is the difference between compliance and confusion.
“Confidential” is one of the most overused and least understood words in the employment context. Employers use it to suppress complaints, to limit settlements, to restrict departing employees, to control investigations, and to claim ownership of information. Employees hear it and assume they cannot speak — about anything, to anyone, ever.
The reality is more nuanced. “Confidential” has different meanings in different contexts, different legal force in each, and different limits depending on who is invoking it and why. An employee who understands these distinctions is an employee who knows when silence is required and when it is not.
Confidentiality during an investigation
When an employer investigates a complaint of harassment or discrimination, it typically instructs the participants — the complainant, the accused, and the witnesses — to keep the investigation confidential. The instruction serves a legitimate purpose: protecting the integrity of the investigation by preventing witnesses from coordinating their accounts.
What the employer can require. The employer can ask employees to refrain from discussing the substance of the investigation with coworkers who might be interviewed — to avoid contaminating the fact-finding process. This request is generally reasonable and should be respected during the active investigation.
What the employer cannot require. The employer cannot use the confidentiality directive to prevent the employee from consulting with an attorney. It cannot prevent the employee from filing a complaint with the CRD. It cannot prevent the employee from exercising any right under FEHA. And it cannot use the directive to punish the employee for disclosing the underlying facts of the harassment — because the facts are the employee’s experience, and the right to discuss them is protected.
The NLRB has also held that blanket confidentiality directives during workplace investigations — applied as a matter of policy rather than based on specific circumstances — can violate employees’ rights under the NLRA. The employer must have a particularized justification for the confidentiality instruction, not a one-size-fits-all policy.
Confidentiality in settlement agreements
Most settlement agreements include a confidentiality provision restricting the employee from disclosing the terms of the settlement — the amount, the parties, sometimes the existence of the agreement itself.
What is enforceable. A provision requiring confidentiality of the financial terms of the settlement is generally enforceable. The employee may not disclose the settlement amount to coworkers, to the media, or on social media. Breach of the confidentiality provision can result in liability for damages — and some agreements include a liquidated damages clause specifying the penalty for breach.
What is not enforceable. The Silenced No More Act (SB 331) prohibits settlement agreements from including provisions that prevent the employee from disclosing factual information about workplace harassment or discrimination based on any FEHA-protected characteristic. The employee may not be silenced about the underlying conduct — only about the financial terms of the resolution. An employer that insists on a provision prohibiting the employee from ever discussing the harassment they experienced has violated SB 331.
The employee may also disclose settlement information in response to a legal process — a subpoena, a court order — and to their attorney, their tax advisor, and their spouse. These exceptions are standard and should be included in the agreement.
Confidentiality of medical information
Medical information obtained through the accommodation process, through leave requests, or through fitness-for-duty evaluations is confidential by statute. As described elsewhere in this series, the employer must keep medical information separate from the general personnel file, must share it only with those who have a legitimate need to know, and must protect it from unauthorized disclosure.
This form of confidentiality is legally required — not by the employer’s choice but by FEHA and ADA regulations. A breach of medical confidentiality is a violation of the law, not merely a breach of a policy.
Confidentiality in NDAs
A non-disclosure agreement typically defines “confidential information” as any proprietary information belonging to the employer — trade secrets, client lists, business strategies, financial data, technology, and similar business-sensitive material.
What is enforceable. An NDA that protects genuinely confidential business information — information that has economic value because it is not publicly known — is enforceable in California. The employee may not disclose trade secrets or proprietary data to competitors or to the public.
What is not enforceable. An NDA that defines “confidential information” so broadly that it covers the employee’s own skills, industry knowledge, general expertise, or information about unlawful employer conduct is overbroad and may be unenforceable. The employee’s own knowledge and abilities are not the employer’s property, and an NDA that effectively prevents the employee from working in their field functions as an unlawful non-compete.
An NDA also cannot restrict the employee from reporting violations of law to a government agency. Federal and state whistleblower protections preempt any contractual restriction on reporting illegal conduct.
Confidentiality of wages
Wage information is not confidential — regardless of what the employer’s policy says. As described elsewhere in this series, Labor Code sections 232 and 232.5 specifically protect employees’ right to discuss, disclose, and inquire about wages. An employer policy that labels compensation as “confidential” is unlawful on its face.
The common thread
The word “confidential” carries authority. It implies legal consequence. It creates the impression that speaking will result in punishment. Employers leverage this impression — sometimes legitimately, sometimes not.
The employee’s task is to ask, each time the word is invoked: what specifically is confidential, under what authority, and with what limits? Medical information — confidential by statute. Settlement amounts — confidential by contract. Investigation details — confidential for a limited purpose and a limited time. Trade secrets — confidential as long as they remain secret. Wages — not confidential at all.
The word is not a talisman. It is a label — and like all labels in employment law, its meaning depends on its context, its legal basis, and whether the employer is using it to protect legitimate interests or to suppress legitimate rights.
When your employer says something is “confidential,” the word alone does not determine your obligations. What matters is the legal basis for the confidentiality, the scope of the restriction, and whether the restriction complies with California law. Confidentiality protects legitimate interests. It does not silence legitimate rights.
This article is general information about California law and is not legal advice. Every situation turns on its particular facts.