Should Your Business Require a Non-Disclosure Agreement?
Many businesses, particularly large technology companies with many competitors, make their employees sign non-disclosure agreements (NDAs). These agreements can help a company protect their confidential information. This may include customer data, client lists, trade secrets, procedures, recipes, ingredients and other information that a company uses to make money.
Does your business have one in place? If not, should you? Non-disclosure agreements have become standard in many industries. In the United States, more than 30% of employees are bound by NDAs.
NDAs can be good if done properly, but they can also be out of control, forcing silence, secrecy and severe limitations on one’s employment. If you have specialized information you want to keep within the company, an NDA can protect you.
What Does an NDA Cover?
An NDA covers a lot of information that companies use on a regular basis. This includes lists of customers, possible leads, product designs, formulas, financial information, marketing plans, various strategies, technical knowledge, manufacturing processes and any specialized procedures. If you have any information you do not want employees, customers, vendors, consultants and contractors to share with others, an NDA is essential.
An NDA will include the parties involved, the information that should be kept confidential, the scope, the length of the term, any exclusions and what happens if the employee breaches the agreement. NDAs tend to last 2-5 years and involve penalties such as fines. You can look online for templates or have an attorney create one for you. This is the better route, since you can get an NDA that fits your business’ unique needs.
What Should Be Left Out of an NDA?
A huge problem with many NDAs is that companies are creating them so they are extremely limiting. Many demand secrecy and silence. An employee is not allowed to talk about their work with anyone. They may not be able to say anything about their working conditions or management. Also, if they witness anything in the workplace that is illegal or ethical, they cannot say anything or risk losing their job. This is why many employees who endure sexual harassment in the workplace stay quiet.
Also, some NDAs go as far as to limit an employee’s employment options. They may bar them from leaving the company within a certain amount of time for fear that the employee will take the company’s trade secrets and share them with a new employer. They may prevent a person from working in the same industry and in the same geographical area.
Learn More About Non-Disclosure Agreements
Non-disclosure agreements can be a good tool for many businesses, as long as the agreement does not lack any protections. The wrong language can cause a lot of problems for your business and open it up to security issues. At the same time, you cannot have the NDA be too limiting for your employees.
Make sure your non-disclosure agreement is written properly and fully inclusive. Orlando non-disclosure & confidentiality agreement lawyer B.F. Godfrey from Godfrey Legal can review your documents and address your concerns. Fill out the online form or call (407) 890-0023 to schedule a consultation.