Is that NDA you signed actually enforceable?

Non-disclosure agreements under Philippine law — what makes them hold up, what makes them collapse, and what both employers and employees should know

Almost every job offer in the Philippines today comes with a stack of documents to sign, and somewhere in that stack is usually a non-disclosure agreement. Most people sign it without a second thought. But an NDA is a real, binding contract — and like any contract, it can be enforced against you, or it can fall apart in court if it was written carelessly. Here's what actually determines which one happens.

The legal basis

The Philippines has no single statute dedicated entirely to NDAs. Instead, their enforceability rests on general contract law: Article 1306 of the Civil Code, which allows parties to agree to any stipulation they want, provided it isn't contrary to law, morals, good customs, public order, or public policy. Because Philippine law respects this freedom of contract, courts broadly enforce clearly written confidentiality clauses.

Several other laws reinforce an NDA from different angles. The Data Privacy Act of 2012 governs how personal data specifically must be handled, independent of what any NDA says. The Intellectual Property Code protects trade secrets as a matter of law, not just contract. And the Civil Code's provisions on human relations — the general duty to act with justice and good faith — can support a damages claim even where the NDA itself is silent or ambiguous.

What makes an NDA enforceable

An NDA that ends up being tested in court or before a labor tribunal tends to succeed or fail on a few recurring points:

• A clear, specific definition of what's confidential. "Everything related to the company" is not a definition — it's vagueness dressed up as coverage, and courts are skeptical of it.
• A reasonable duration. Confidentiality obligations that run indefinitely are more defensible for genuine trade secrets, but broad restrictions with no time limit at all invite scrutiny.
• Carve-outs for information that was never truly secret. Information already in the public domain, independently developed, or lawfully received from someone else generally cannot be locked down by an NDA.
• Proportionate remedies. Liquidated damages or penalty clauses need to bear some relationship to the actual harm a breach could cause, not function as a scare tactic.

What an NDA cannot do

An NDA is not a blank check to control a former employee's career. Philippine law draws a firm line between protecting confidential information and restraining someone's ability to work. An NDA generally cannot:

• Prevent an employee from using general skills, knowledge, or experience they gained on the job — as opposed to specific confidential information.
• Block disclosure of information that is a matter of public interest or that the law requires to be disclosed, such as in a government investigation.
• Be used as a vague catch-all to justify serious sanctions like termination. In Yonzon v. Coca-Cola Bottlers Philippines, Inc. (G.R. No. 226244), the Supreme Court made clear that employers cannot rely on an overly broad, poorly defined confidentiality clause to justify disciplinary action — the obligations have to be specific enough that an employee can actually know what they're bound not to do.

If an NDA drifts into territory that functions like a non-compete — stopping someone from working in the industry altogether rather than protecting specific information — courts will scrutinize it the same way they scrutinize a restraint of trade, and an overly broad clause risks being struck down as against public policy.

Where NDAs are enforced, and how

Disputes over an NDA's confidentiality obligations can surface in more than one forum, depending on what's at stake — a labor case if the issue is discipline or dismissal tied to an alleged breach, a civil action for damages if the claim is about compensation for harm caused, or occasionally a criminal complaint if the disclosure amounts to a separate offense, such as revealing trade secrets. Employers seeking to enforce an NDA need to be prepared to show more than a general assertion of secrecy — real evidence of the confidentiality measures in place and the actual harm caused strengthens the case considerably.

Practical guidance

For employers: Define confidential information by category and by example — pricing, forecasts, source code, client lists — rather than relying on a single sweeping phrase. Pair the NDA with real internal safeguards, such as access controls and clear labeling of sensitive documents, since a court will ask what protective measures actually backed up the claim of confidentiality. Keep remedies proportionate to plausible harm.

For employees: Read what you're agreeing to keep confidential, and for how long. An NDA that only protects genuinely sensitive company information is normal and expected; one that tries to claim ownership over your general skills or restrict where you can work next deserves a closer look, and possibly a conversation with a lawyer before you sign.

The bigger picture

NDAs are one of the most common contracts signed in the Philippines, and also one of the most rarely read carefully. Their enforceability isn't automatic just because a signature is on the page — it depends on whether the agreement is specific, proportionate, and genuinely tied to protecting real confidential information rather than controlling a person's career after they've moved on.

This article was prepared with the assistance of artificial intelligence and, while carefully reviewed, may contain inaccuracies; it does not constitute formal legal advice, and readers should consult a qualified attorney regarding their specific circumstances. Read our full firm caveat at the top of this hub.