If you are asked to sign a non-disclosure agreement (NDA), it is wise to confer with an attorney regarding what you are giving up and what you are gaining from it. Most non-disclosure contracts are between an employer and employee, but the focus is that one party is prohibiting the other party from disclosing proprietary or confidential information to others. The party that is agreeing to the non-disclosure must receive something of value in exchange for signing the contract.
An NDA can be included as a provision in a larger contract or it can be its own separate agreement. An NDA may also be referred to as a confidentiality agreement, secrecy agreement or confidential disclosure agreement. Regardless of the title used for the contract, it is imperative that you understand its terms and what you are agreeing to when you sign it.
In the employment scenario, the NDA is effective while the employee is employed and for a set amount of time following his/her termination of employment. The NDA must protect data or information that is both valuable and confidential for it to be enforceable.
An NDA may also be used in other circumstances where a party desires to protect proprietary information. For example, if an employer is interviewing applicants for a senior staff position, it is often impossible to determine if the candidate is qualified without discussing confidential information. NDAs are also used when third party vendors must be given access to private information to perform services for the company. Finally, an NDA is commonly used in stock or company purchases. During the due diligence process, the interested buyer must have access to private company information. This may include reviews by attorneys, accountants and other similar parties.
Employers benefit from non-disclosure agreements because they protect the proprietary information of the company from competitors and, if the contract is breached, it gives the employer recourse. Additionally, most NDAs include a provision that provides the company has ownership of anything the employee develops, invents, writes or produces while employed by the company.
If you need the advice and guidance of an experienced business attorney, contact our office today to schedule an appointment with one of our knowledgeable attorneys. We can help make sure you are protected under your legal documents and if a dispute arises, we will work diligently to obtain the best possible outcome in your case.