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What should you know about non-disclosure agreements?

On Behalf of | Feb 23, 2022 | employment law | 0 comments

When a new employer hires you, they may ask you to sign a non-disclosure agreement (NDA). These contracts put limits on the sharing of business information, usually in the hopes of keeping proprietary information and trade secrets under wraps.

It is important for employees to understand the scope of NDAs before signing one. A good understanding ensures you remain compliant, but it can also help you identify potential issues with the contract. Here are a few things to keep in mind.

Are there different types of NDAs?

Mutual NDAs are often used between two separate business entities. These contracts protect information possessed by both parties from disclosure, and provide legal recourse to both in case of a breach of contract. Unilateral NDAs take place between the business and the employee. In this case, the employee must keep certain information confidential based on the terms contained within the contract.

What happens if you break the contract?

Like with other types of contract breaches, the employer could file suit against you depending on the nature of the breach. This illustrates the importance of fully understanding the terms contained within the contract, so you avoid breaking them. For example, if the contract uses vague language, the employer could say that you violated the terms simply by discussing some aspect of your employment.

What terms should I look out for?

Not all terms within NDAs are valid from a legal perspective. For example, they cannot cover information you received from a source rather than your employer. They also cannot cover any information considered common knowledge, as it is impossible to conceal from others. Additionally, your business cannot commit illegal acts and ask you to withhold them.

If you have questions about an NDA, refrain from signing until you have it reviewed. Also, feel free to discuss any terms you find confusing or vague with the employer to ensure everyone is on the same page.