First amendment advocates argue non-disclosure agreements create conflicts with existing public record law
Data center developers in Pennsylvania are increasingly using nondisclosure agreements (NDAs) with public officials, sparking concerns about transparency and conflicts with public records laws. While developers claim NDAs protect competitive interests, first amendment advocates and some officials argue they hinder public accountability for projects. Pennsylvania lawmakers have introduced bills to prohibit or disincentivize the use of such NDAs, with some bills passing the state House.
Data center developers in Pennsylvania are increasingly requiring public officials to sign nondisclosure agreements (NDAs) before discussing proposed projects, a practice that has drawn sharp criticism from first amendment advocates, lawyers, and some elected officials. These NDAs are seen by critics as undermining government transparency and accountability, particularly when officials are making decisions on zoning and permitting that affect their constituents. Anthony Township Supervisor Craig High famously refused to sign an NDA with Talen Energy, only to later discover the company was planning a data center in Montour County, a project that subsequently faced local resistance and was voted against.
Public records requests by Spotlight PA revealed at least eight NDAs signed by township, county, and state officials for data center projects across Pennsylvania. While companies like Microsoft have pledged to cease using NDAs with local governments, industry representatives such as Dan Diorio of the Data Center Coalition argue that NDAs are common in business to protect competitive interests and prevent land speculation. However, consumer advocacy groups like Public Citizen contend that these agreements invert the relationship between officials and their constituents, pushing transformative deals through without adequate public input.
In response, Pennsylvania lawmakers have introduced legislation to prohibit or disincentivize the use of NDAs by data center developers. State Sen. Tracy Pennycuick (R., Montgomery) proposed a bill to ban public agencies from signing such agreements, citing concerns about a lack of transparency for projects, including a 1.4 million square foot data center in Limerick Township. State Rep. Joe Ciresi (D., Montgomery) introduced a bill to amend a tax exemption, making it applicable only to data centers that pledge not to use NDAs. Both bills have passed the state House with bipartisan support and are currently awaiting consideration in the Senate, with lawmakers hoping for passage this fall despite warnings from industry groups about the potential for hindering development.