Against the NPC Confidentiality Agreement Packet

Background

At the beginning of the 2023 term, DSA’s staff asked the newly elected NPC to sign a document known as the “2023 to 2025 National Political Committee Good Governance Agreement” as part of a routine process related to IRS filings. However, NPC members soon came to suspect that signing this document was a precondition for accessing organizational information critical to the execution of their duties. Although it has been suggested by multiple NPC members, no one from staff has yet confirmed that they consider it a prerequisite to being given access, nor has any other reason or response been given to NPC. At the time of writing, almost half of the NPC, including all three Red Star members, refused to sign this document due to concerns over a so-called "confidentiality agreement" contained within. This means that a majority of the NPC cannot view basic organizational information, such as the results of votes from previous terms, the line-item budget, and more. Red Star has significant concerns with the “confidentiality agreement” as it stands and believes that signing on to it is not worth the pitfalls of being restrained by such a document.

Issues With the “Confidentiality Agreement” Document

The fundamental premise of the Good Governance confidentiality agreement is flawed, as there is no legal need for directors of a non-profit corporation to sign a confidentiality agreement in the first place. Directors of a non-profit board have a default obligation to keep information appropriately marked as confidential as part of their fiduciary duties. Holdgreiwe v. Nostalgia Network, Inc., No. 12914 (Del Ch. 1993) states (“[The director] is already under an obligation to maintain the confidences of [the corporation]; to use its confidential information only to inform discussion among directors and action by the board or a committee. Disclosure of such information to a third party is a violation of duty whether or not an undertaking is entered. Thus, such an undertaking seems unnecessary.”).

It is apparent that there is no legal basis for the continued refusal to share all information with DSA’s NPC members, regardless of their signature on this document. At a minimum, documents such as the line-item budget, which is explicitly stated as not confidential in the “confidentiality agreement,” can be shared with all members of the board (and arguably, the membership of DSA as a whole). The only way this information could be withheld is if the previous NPC voted to require the next NPC to sign a confidentiality agreement before any organizational information was shared with new NPC members at the start of their term. Under the present “confidentiality agreement,” the sitting NPC cannot know whether or not the previous NPC held a vote to establish this confidentiality agreement since information about previous votes is also withheld under the agreement. This sort of Catch-22 situation is unacceptable for a serious organization, creating a structurally hostile environment for newly elected NPC members where they are forced to decide whether to sign a document for which they have no context and for which they can only get context if they sign it.

In the District of Columbia, where DSA National is incorporated, the following standards for an enforceable confidentiality agreement are as follows:
A confidentiality agreement will be enforced to the extent it is:

Narrowly tailored to protect the employer's legitimate business interest,
Not more restrictive than necessary to protect the business interest at stake,
Limited to a reasonable duration,
Limited to a reasonable territorial coverage, and
The scope of the precluded activity is reasonable when considering the interests of the employer and the effect on the employee and the public.

Hospitality Staffing Solutions, LLC v. Reyes, 736 F. Supp. 2d 192, 198 (D.D.C. 2010).

In this regard, the most glaring issue with the current agreement is that it has no duration, implying it is indefinite. The modern trend is that indefinite-duration confidentiality agreements are presumed unenforceable, making it likely that the current “confidentiality agreement” is invalid as written. Beyond the courts, the NLRB recently clarified that indefinite NDAs are also retroactively invalidated. I am intimately familiar with the impacts of an indefinite NDA, as I entered into one with a former employer as part of negotiations for my exit in a deal for the recognition of the bargaining unit I was organizing. The lack of an end date to a confidentiality agreement is a serious issue and is now appropriately recognized as such by the US legal system and the NLRB. There is no good reason that DSA’s highest body would continue to abide by a document that is likely invalid going forward and for anyone who had previously signed it.

Further, we take serious issue with the construction of clause two of the “confidentiality agreement.” This clause states that information pertaining to “personnel information, financial information, and grievance information” may be considered confidential. This information is not required to be confidential; it is at the board's discretion. If we allow that this information is by default confidential, in practice, it is routinely shared with members of DSA who are not bound by any confidentiality agreements. For example, in the unlikely scenario that the “confidentiality agreement” in the Good Governance Agreement is valid, only NPC members and staffers are legally subject to confidentiality over information in a grievance. In contrast, the Chapter Impartiality Form provided to chapter HGOs, which was only adopted after the 2021 convention and with limited enforcement, is not a confidentiality agreement. This means that under the current grievance policies of DSA, NPC members are supposedly bound by a “confidentiality agreement,” but other members involved in a grievance are not, as they do not sign a valid confidentiality agreement themselves. Non-NPC/staffer members of the Personnel Committee are not bound by any confidentiality agreement; therefore, personnel information is not considered confidential for their purposes but is considered confidential to the NPC based on the aforementioned objectionable second clause. It is absurd to have NPC members be bound to confidentiality on matters that regular members are not, and it fundamentally undermines the current confidentiality regime claimed to rule DSA. The “confidentiality agreement” that Red Star NPC members have refused to sign is representative of a much broader issue of poor internal confidentiality culture that needs to be thoroughly reexamined and reformed.

In addition to the serious governance issues introduced by this "confidentiality agreement,” there are fundamental issues caused by its poor construction. Terms are left mostly undefined, there are no headings, and the very first sentence refers to a vote whose date is simply “insert date here,” providing no legal reference point for the document's existence. That the “confidentiality agreement” cannot even properly refer to this mysterious vote that brought it into existence undermines its legitimacy as a document, and NPC members have every right to be skeptical and critical of a document that cannot even properly cite that vote that supposedly created it.

In summary, this “confidentiality agreement” is legally unnecessary, arguably unenforceable, and so poorly constructed that it cannot possibly achieve its aims. It represents a serious lack of professional standards for NPC operations, part of a pattern that has contributed to the mismanagement of the national organization and is emblematic of the NGO-style deference-to-authority that is antithetical to a member-run mass org. We refuse to allow poor organizational practices like this “confidentiality agreement” to continue. That is why we are supporting Bread and Roses NPC members' Resolution for Shared Documents. If passed, this proposal will grant NPC members access to the internal information they already have a right to. Once the entirety of the NPC has access to this information, they can make more progress on serious issues like our budget deficit. And, as an added bonus, we will see if a proper vote was ever held on the creation of this controversial document. We ask that members of DSA continue to demand transparency and accountability from its elected leadership as part of the effort to bring DSA and the socialist movement forward.

Disclaimer

The information provided in this statement does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available in this statement are for general informational purposes only.

Further Discussion

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