Questions to Ask Before Signing a Non-Disclosure Agreement
Many industries are highly competitive. Take technology, for example. Companies such as Apple and Samsung are always trying to come out with new and innovative phones. Video game companies like Nintendo and Playstation want to create games for which users will pay top dollar.
Information is power, and it’s worth a lot of money. If an employee gives this proprietary information to another company, it can lead to a loss of profits. Information is not just stored with employees, though. It can be stored physically, such as on documents or in manuals. It can also be digital, such as in computer files.
Because of this, many companies require non-disclosure agreements, or NDAs. These documents are often given to employees upon hire to ensure they understand what type of information is deemed proprietary and therefore cannot be shared with others. It must be kept private or else a person can face legal consequences.
NDAs are not often given much thought during the hiring process. In fact, new employees are often given so much paperwork to review that NDAs tend to get lost in the shuffle. On the employee end, being too pushy with an NDA can cause an employee to feel too pressured, especially since they are in the process of learning their new job duties. However, ignoring the NDA can end up being a costly mistake.
If you are an employee, make sure you understand your obligations. Here are some questions to ask before signing.
Who is Sharing the Information?
There are two main types of NDA: mutual and unilateral. Most are mutual, since both the employer and employee will be sharing information. However, there may be cases where just one party—the employer—is sharing information. These are called unilateral NDAs. Keep in mind that if you are an employee and you do sign a unilateral NDA, but share information with the other party, it may not be protected under the law.
What is Being Shared?
Make sure you understand what information must be kept confidential. This will vary based on the industry, so it’s a good idea to be broad. This will make it easier for both parties to understand what is and what is not proprietary information and keep information from being accidentally disclosed to others.
What Damages Are Involved?
Breaching an NDA can come with serious financial consequences. One breach of contract involving Oculus cost $250 million in damages. While this is a severe example, breaches can still cost dollar amounts in the six or seven figures. To avoid this, it’s best to fully understand the NDA at the get-go to avoid such as financial mistake.
Learn More About Non-Disclosure Agreements
Information is scared. Employees have access to crucial information that, if used improperly, can harm a business. That is why many businesses operate off of non-disclosure agreements.
Whether you’re a company or an employee, you may want help with a non-disclosure agreement. If you want to create one or sign one, contact Orlando non-disclosure & confidentiality agreement lawyer B.F. Godfrey from Godfrey Legal first. He can address your concerns and guide you through the process. To learn more, call (407) 890-0023 or fill out the online form.