Last week, a Washington County Circuit Court judge dismissed a lawsuit alleging the city of Fayetteville violated the Arkansas Freedom of Information Act when it did not provide copies of nondisclosure agreements as part of a records request related to drone manufacturer Swarm Aero. In the dismissal, the judge cited the records request specifically called for communications between Swarm Aero and the city, not for the NDAs themselves.
Ozarks at Large's Sophia Nourani spoke with John Wilkerson, general counsel and legislative director for the Arkansas Municipal League, about the broader legality of city officials signing NDAs and potential ethical concerns surrounding the practice. Wilkerson says that while they are allowed, they occur in specific instances and do not trump FOIA.
Wilkerson: So if the NDA is attempting to circumvent FOIA, which I have zero reason to believe that that's what's happening in this case. But if the NDA is trying to purposefully circumvent FOIA or do something else that you're not allowed, that's really when the quote unquote rules kick in. Generally speaking, though, a mayor, city can enter into these NDAs again for the appropriate reason.
Nourani: I wanted to ask how the Arkansas Freedom of Information Act ties into NDAs in those instances. How do those things interact together and kind of describe those parameters?
Wilkerson: I think the first thing to understand about FOIA is that it is for documents and public meetings. And so public documents are generally FOIA. There are some exceptions. And one in which that's applicable here, in a broader context, is documents that create a competitive disadvantage for a business. There are exceptions to releasing information that causes that competitive disadvantage. And so FOIA is for obviously turning over documents and also for things that have to happen in a public meeting, which is pretty much everything city related has to happen in a public meeting. There are some exceptions with executive sessions, but that wouldn't be applicable here.
And NDA is geared towards protecting the conversations that are occurring between, in this case, a city and a developer. And like I mentioned earlier, there are some instances in which the developer wants to keep, you know, whatever proprietary information or technology under wraps, at least again, in the initial discussions. And because it's so sensitive and, you know, the city is in a position where, you know, they want to encourage economic development. They want to see where potential projects go. And when a developer comes to them and says, look, you know, we're not going to talk to you unless, you know, you sign an NDA to protect, you know, our conversations from getting out in public, you know, if there's any NDA provision or provision in an NDA related documents that needs to be weighed against, you know, the FOIA.
Now, an NDA could work within the scope of FOIA, and they often do when it comes to documents. But again, typically NDAs are designed to keep the initial conversations between a developer and a city confidential, for lack of a better word, confidential.
Nourani: Is this a common practice? Tell me about how often city officials are signing NDAs. And is this something that has become more common, or is something that we're seeing more frequently now?
Wilkerson: I wouldn't describe them as common because it's not as if this happens every single day of the week. But they're not uncommon either. They are a tool of economic development that sometimes has to be entered into these types of projects that require that sensitive, you know, conversations be kept confidential. Those situations don't happen every day. Not every single situation requires an NDA. But, as far as the question about whether they are becoming more common, they're certainly in the news more. And I think that as our economic landscape shifts and as cities, and the state for that matter, you know, try to do more and more to spur economic development, I would be surprised if they don't become more common. And so again, right now, they're not an everyday thing, but they're not uncommon in the sense of when I hear of one, I think, oh my goodness, I can't believe they're doing this. That is not at all the case. It is a tool. And they are. And I do believe they are more than likely going to become more common.
Nourani: And just kind of going off of that, I wanted to talk about the overall potential ethical concerns. I'm curious what your thoughts are on that and how that fits into this conversation.
Wilkerson: I think it's a little, that's a little tougher to answer, because obviously the public's perception always needs to be kept in mind. And because things like, you know, this, this could happen, and the public asked questions about why you signed it. And I think that's where a city, and I think Fayetteville has done this, is explained why they had to do that in this situation. You know, they were, you know, again, they, being the city, as I understand it, were having those initial conversations. But at the same time, you know, as we're sort of seeing in this situation, you know, city needs to stand ready to explain to the public, you know, why an NDA was signed and be ready to answer to that, because, you know, it leads to questions like this. But again, it is a tool. It's sometimes it's a necessary tool based on the developer's needs, but you always have to stand ready to explain to the citizenry why, you know, a certain action was taken, especially when it deals with something that in which you're certain information is confidential, at least for a portion of time.
Nourani: Yeah. Thank you for that. Do you feel like there's anything else that is pertinent to add when we're talking about NDAs and city government?
Wilkerson: The thing that really keep understand about an NDA is it is for the initial conversations had between a developer and a city. There's nothing that can be done, you know, to bind the city in terms of spending public money. Rezonings, you know, extending infrastructure, that that can be done without a public meeting. So the NDA is about those initial conversations. But any action taken by the city, again, public money being spent, infrastructure being extended, rezonings, to name just a few. That all has to be done in a public meeting, which is where the FOIA comes back around fully into the picture.
When I look at the situation in Fayetteville, and granted I wasn't there for it, I don't know the details of it, but, you know, I have talked to the mayor about it. You know, so I've become more knowledgeable about what happened to me. It worked the way it, they're sort of designed to work, which is the NDA covers the initial conversations. And then when we get to an actual decision that had to be made by the city, they had council meetings, board of adjustment meetings. They had the, you know, the meeting at the public library. And so it worked. I mean, it worked how they're sort of designed to work. Again, initial conversations need to be kept quiet. But then when we get to actual making decisions at the city level, that has to be done publicly, which is what happened.
Again, as far as what I know after talking to Mayor Rawn. That's what happened in this situation. The NDA has its own, obviously the NDA is, you know, people are like, what is that? What is that? What does it mean? And, you know, is that good? Is it bad? I get all those questions from the public, which again, is why the city needs to be ready to explain, you know, what they did and why they did it. But it feels like it was the actual project itself that really caused this hubbub, so to speak.
That was John Wilkerson, general counsel and legislative director for the Arkansas Municipal League, speaking with Ozarks at Large's Sophia Nourani.
Fayetteville Mayor Molly Rawn recently released a statement regarding transparency. The statement says that effective immediately, city policy will now require approval from the mayor and the city attorney prior to any staff member signing an NDA. In addition to that, any future NDAs shall be retained for a minimum of five years from the date of execution or until the project in question has completed its way through the public process, whichever is longer.
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