Are NDAs legally binding in Australia? A guide for employers [2026]

On 1 July 2026, Victoria became the first jurisdiction in Australia, and one of the first anywhere in the world, to restrict how NDAs can be used in workplace sexual harassment matters. If you employ anyone who usually works in Victoria, your settlement templates need to change. If you don't, they still probably should, because the direction of travel is clear and the federal picture is moving too.

I've spent a lot of time in Australian employment compliance, and I expect the common mistake here will be over-correction. Employers hear "NDA restrictions" and assume every agreement they've ever issued is now suspect. Most of them aren't. The Act is narrower than the headlines suggest, and knowing where its edges sit is the difference between adjusting one settlement process and tearing up paperwork that was fine.

What an NDA covers

An NDA is a contract that binds one or more parties not to disclose specified confidential information. Sign one and you take on an obligation, plus a set of consequences if you break it. The language people use around NDAs tends to oversell what that achieves. An NDA gives you a contractual right to act when information leaks, which is a remedy rather than a barrier.

In an employment context, NDAs typically cover:

• Trade secrets, formulas, manufacturing processes, and proprietary technology.

• Business plans, commercial strategy, and financial information like budgets, sales figures, and projections.

• Customer and client data, including contact details and purchasing history.

• Intellectual property such as patents, trademarks, and copyrights.

• Personal information about clients or colleagues.

What an NDA can't cover is information already in the public domain, and it can't stop someone reporting a crime or giving evidence in court. Australian courts won't enforce a confidentiality agreement that operates against the public interest, and they'll strike down terms drafted so broadly that they're unreasonable. A clause that tries to bind an employee to secrecy about anything they encountered during employment is the kind of thing that gets read down or thrown out.

You'll also see NDAs called confidentiality agreements, confidential disclosure agreements, or proprietary information agreements. It’s the same thing, just with a different name.

The three types of NDAs you'll encounter

Unilateral (one-way)

One party discloses, the other receives and is bound. This is the standard employment NDA, issued at onboarding, often folded into an employment contract or offer letter as a confidentiality clause rather than sitting as a separate document.

Mutual (two-way)

Both parties disclose and both are bound. Common in mergers, acquisitions, and commercial negotiations where each side needs to see the other's numbers.

Multiparty

Three or more parties to a single agreement. Less common, but useful when you'd otherwise be papering the same deal with a stack of separate NDAs.

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What changed on 1 July 2026

The Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 (Vic) commenced on 1 July 2026. It came out of the Victorian Ministerial Taskforce on Workplace Sexual Harassment, which found NDAs were being misused to silence victims, protect employer reputations, avoid liability, and conceal serial offenders.

The core shift is that confidentiality is no longer the default in a sexual harassment settlement. Before, an employer could propose an NDA as standard practice. Now the worker has to ask for it.

For an NDA covering workplace sexual harassment to be valid in Victoria, all of the following must happen:

• The worker who made the complaint requests the NDA. It has to be their express wish, not something offered to them.

• They're given a mandatory information statement before signing.

• They get a 21-day review period to seek advice, which they can choose to shorten or waive.

• Both parties confirm in writing that the preconditions were met.

Two more provisions matter for how you run a settlement. Employers are prohibited from pressuring or influencing a worker into an NDA, so the usual commercial nudging is off the table. And a worker who signs one can terminate it after 12 months by giving written notice, which means the confidentiality you negotiate has a shelf life you don't control.

Who this applies to, and who it doesn't

The geography here is counterintuitive, and it catches people out.

The Act follows the worker, not the incident. It applies to workers who usually work in Victoria, including where their employer is based interstate. So a Sydney-headquartered company with a Melbourne team is covered for that team. Conversely, it doesn't capture harassment that physically occurred in Victoria where the complainant usually works or is based interstate. A Perth-based employee harassed at a Melbourne conference sits outside it.

It also doesn't apply retrospectively. NDAs entered into before 1 July 2026 are unaffected.

What the Act doesn't touch

The Act regulates NDAs about workplace sexual harassment. It does not restrict NDAs covering IP, trade secrets, commercial information, or any other ordinary confidentiality purpose. Your standard onboarding NDA is untouched, and this is the distinction most likely to get lost in the noise.

Within harassment matters, there are carve-outs too. Confidentiality clauses are still permitted for the amount of any financial compensation paid, and for the name of a harasser who was under 18 at the time. The preconditions don't apply to those. The Act also doesn't stop you giving a lawful and reasonable direction to keep information confidential for the purposes of a workplace investigation, so your investigation process survives intact.

If you're outside Victoria

Victoria is the only jurisdiction that has legislated, but the Australian Human Rights Commission's Respect@Work report recommended restricting NDAs in sexual harassment matters federally, and the national conversation hasn't gone quiet.

My read: if you operate across state lines, running two different settlement processes is more expensive and more error-prone than running one. I'd align nationally to the Victorian standard now rather than rebuild the process again in a few years. It costs you very little. The worker-requests-it model is defensible in every jurisdiction, and it's a materially better position to be in if a matter ever becomes public.

What makes an NDA hold up

Outside the harassment context, enforceability turns on drafting. Australian courts uphold NDAs that are reasonable, specific, and consistent with public policy. Vague ones get read down.

An enforceable NDA needs:

• The full names and roles of every party, and who each may share information with.

• A defined scope of confidential information, including the form it takes. Is a verbal disclosure covered, or only written material?

• Stated exclusions, such as information that later becomes public knowledge.

• A term. Employment NDAs often run past the end of the working relationship, and can run indefinitely if the scope stays reasonable.

• Consequences for breach, including any injunctions or damages you'd seek.

That last point is where most templates get thin. A breach clause that just says the agreement is binding gives you nothing to point at. Spell out the remedy.

NDAs and the non-compete ban

The federal government announced in the 2025–26 Budget that it will ban non-compete clauses for workers earning under the Fair Work Act high-income threshold, which rose to $183,100 on 1 July 2025. The ban is set to take effect from 2027, operating prospectively, following consultation and passage of legislation. The government has also flagged closing competition law loopholes around wage-fixing and no-poach agreements, and is consulting on non-solicitation clauses.

These two things get mixed up constantly. A non-compete restricts where someone can work after they leave. An NDA restricts what they can disclose. Only one of those is about to be substantially narrowed.

For most of your workforce, the non-compete you've been relying on is going to stop working, and confidentiality obligations become the main protection you have left. The quality of your NDA drafting is about to matter a great deal more than it did. If your confidentiality clauses have been carrying a light load because the non-compete was doing the heavy lifting, that arrangement has an expiry date.

I'd audit contracts now rather than later in the year, when everyone else will be doing it at once.

When to use an NDA

Common triggers:

• Onboarding an employee or contractor who'll access proprietary or customer information.

• Presenting an invention or business idea to a prospective partner, investor, or employee.

• Sharing financial information during a raise or a deal.

• Demonstrating a new product or technology to a prospective buyer.

For employees and contractors, the NDA is usually provided at onboarding, either standalone or as a confidentiality clause inside the employment contract or offer letter.

Where Rippling fits

Most teams can get an NDA drafted. The administration around it is where the time goes.

The first problem is version control. When a rule changes, like the one that landed on 1 July, you need to know which template every recent hire signed and which version is going out tomorrow. Most teams find out they can't answer that quickly at exactly the moment they need to. In Rippling, the answer is a lookup: which template, which version, signed when.

The second is that your paperwork lives apart from your employee data. Rippling runs HR, IT, and finance on a single source of truth, so the record of who signed what sits against the same employee profile as their contract, their state, and their start date. When Victorian rules apply to Victorian workers, you can identify who that is without exporting three spreadsheets and reconciling them by hand. Rippling's research across 540 Australian business leaders found the gap between systems is where compliance work goes wrong.

When generating NDAs, offer letters, and onboarding documents in Rippling, you send them for e-signature, and the completed record files itself against the employee. Workflows can trigger the right document set based on role, location, or start date, so a Victorian hire and a Queensland hire get the right paperwork without anyone needing to check.

Your confidentiality clause still needs a lawyer. But when something goes wrong, the first question you'll be asked is who signed which version, and that one you can answer in a couple of clicks.

Frequently asked questions

Are NDAs enforceable in Australia?

Yes. NDAs are legally binding contracts and Australian courts enforce them, provided they're reasonable, specific, and not contrary to public interest. Since 1 July 2026, NDAs relating to workplace sexual harassment connected to Victoria face additional statutory preconditions, and won't be enforceable unless those are met.

Does the Victorian NDA law apply to my business if we're not based in Victoria?

Possibly. The Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 (Vic) applies to workers who usually work in Victoria even where their employer is based interstate. If you have Victorian staff, you're covered for those staff regardless of where your head office sits.

Does the new law ban NDAs in sexual harassment cases?

No. Victoria's new NDA law restricts how they're used rather than banning them. An NDA is still permitted where the worker requests it, has received a mandatory information statement, and has had a 21-day review period to seek advice.

Are my existing NDAs affected?

No. The Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 (Vic) doesn't apply retrospectively. NDAs entered into before 1 July 2026 are unaffected.

How long can an NDA last in Australia?

There's no fixed statutory limit, and an NDA can run indefinitely if its scope stays reasonable and it complies with the law. The exception is a Victorian harassment NDA signed on or after 1 July 2026, which the worker can terminate after 12 months with written notice.

Is an NDA the same as a non-compete?

No. An NDA governs what someone can disclose. A non-compete restricts where they can work after leaving. Non-competes for workers earning under the Fair Work Act high-income threshold are set to be banned from 2027.