This study examines whether weakening employee non‐disclosure agreements (NDAs) affects the flow of information to capital markets via the business press. After state laws weakened NDAs related to misconduct, treated firms exhibit a significant increase in corporate news relative to control firms. The increase is driven by non‐financial news, particularly about legal issues and corporate social responsibility. Articles become significantly more negative in tone and generate stronger market reactions, indicating that employees increasingly share informative negative information with journalists. Further, we document increased interactions between employees and journalists, with more articles citing employees as sources. Our evidence suggests that employees are an important source of corporate information for journalists and that blanket NDAs can impede this channel. Overall, the study highlights an important trade‐off between protecting firms' confidential information and preserving transparency. Our findings suggest that boards, executives, and regulators should design employment confidentiality policies that protect legitimate proprietary information without suppressing the disclosure of misconduct that is important for market discipline and governance.

Using news text from The Wall Street Journal and macroeconomic disclosures in 10-K filings, we address the challenge of characterizing both time-varying aggregate risks and firm-level risk exposures. We develop a disclosure-based measure of systematic risk that (1) reveals salient macro risks in each period, (2) provides a text-based estimate of earnings exposure to these risks, and (3) explains the cross-section of stock returns. We also show that macro disclosures are pervasive across the annual report, grow over time, vary with the business cycle, and exhibit within-firm variation, consistent with the time-varying nature of systematic risk exposure. Overall, disclosures yield transparent and economically interpretable estimates of firm-level systematic risk. Data Availability: Data are obtained from SEC filings, Bureau of Economic Analysis, The Wall Street Journal, Compustat, CRSP, I/B/E/S.