Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Whistleblowers Accuse OpenAI of Illegally Restrictive NDAs
Governance | Jul 15, 2024
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Whistleblowers accuse OpenAI of enforcing illegal NDAs, sparking legal scrutiny and internal review
13 July 2024 – As reported in Techcrunch, former employees of OpenAI have accused the business of enforcing unlawful non-disclosure agreements (NDAs). According to these whistleblowers in a letter, the NDAs forbid them from saying anything negative about publicly accessible data, in addition to preventing them from divulging confidential information.
- These whistleblowers said that the agreements contained provisions that broke securities laws and significantly limited their capacity to speak out, even on subjects that were already known to the public. They claim that this has created a "chilling effect" that deters workers from informing authorities about unethical or unlawful activity.
- It is alleged that these restrictive agreements violate SEC Rule 21F-17(a) which guarantees that people can report possible securities breaches to the Securities and Exchange Commission (SEC) without fear of reprisal. The SEC has recently increased the rigour with which it enforces this regulation, fining businesses who break it severely. The goal of the rule's implementation is to safeguard informants and promote openness within.
See: PwC Partners with OpenAI to Resell ChatGPT Enterprise
- In response to the allegations, Sam Altman, the CEO of OpenAI, acknowledged that the company's off-boarding agreements contained such restrictions, and the company updating the wording to adhere to legal requirements. He reaffirmed that OpenAI is dedicated to upholding fair employment standards and stressed that the company has never cancelled any employee's vested equity due to conflicts over NDAs.
Corporate transparency and labour rights in the tech sector
NDAs with restrictions may impede the exchange of information required for regulatory agencies to operate efficiently. Businesses should ensure that employment agreements comply with the law in order to prevent penalties and reputational harm.
In order to assure compliance, businesses in all sectors should review their procedures as the SEC continues forward with its crackdown on unauthorized NDAs. Concerned employees are advised to consult legal experts to address complicated NDA concerns and get representation.
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