Non-disclosure Agreement and the Theranos Scandal

Non-disclosure agreements have been around for a long time and are often used to protect confidential information. It is a legal agreement between two or more parties, where one or both agree not to disclose information that is marked as private or confidential.

In the case of Theranos, a technology company that claimed to have a revolutionary blood testing machine, non-disclosure agreements were used to shield the company`s secrets and prevent the public from knowing the truth about its faulty technology.

Theranos founder, Elizabeth Holmes, and her partner, Sunny Balwani, were indicted on charges of wire fraud and conspiracy to commit wire fraud for making false claims about the effectiveness of their blood testing machines. In the investigation that followed, it was revealed that many employees had signed non-disclosure agreements that prevented them from speaking out about the company`s fraudulent practices.

These agreements forced employees to keep silent about the wrongdoing they witnessed, giving Theranos the ability to continue its fraudulent activities without consequence. It also created a culture of fear and secrecy within the company, making it difficult for any employee to speak out against what was happening.

In the end, the non-disclosure agreements that were meant to protect the company`s secrets ended up being a tool used to hide its fraudulent practices and mislead investors and the public.

The Theranos scandal serves as a reminder of the importance of transparency and accountability. Non-disclosure agreements can be a useful tool when used properly, but they should never be used as a shield to hide illegal or unethical practices.

In conclusion, non-disclosure agreements have a valuable purpose in protecting confidential information. However, in the case of Theranos, these agreements were misused to prevent employees from speaking out against the company`s fraudulent practices. It is crucial that companies ensure that they are using non-disclosure agreements ethically and transparently, and that they are never used to conceal unethical or illegal practices.

Previous Free Co-Ownership Agreement Template