Employees can be required to sign a non-disclosure agreement (NDA). Here’s an ultimate employee guide to nondisclosure agreements.
One common way NDAs are used is to protect confidential information. An NDA is usually required when one party wishes to disclose information to another party but doesn’t want the other party to steal it. Many business endeavors require confidentiality and signing an NDA is common.
What is an NDA
A Non-Disclosure Agreement (NDA) is a binding contract between two or more parties that establishes a confidential relationship. NDA often serve to protect sensitive information from being shared outside the parties involved and are commonly used when businesses enter into negotiations with each other. The two most common NDAs are mutual and non-mutual disclosure agreements.
When Should Employees Use NDAs
Any employee with access to confidential information should be required to sign a reasonable confidentiality agreement. An NDA reminds employees a company values its confidentiality of certain information and outlines an employee’s obligation to the company.
Be Careful When Signing an NDA
Employees should carefully read any NDA. Things to consider before signing an NDA are:
- Look for broad or vague language
- Information is already known or if it is acquirable outside the confidentiality agreement
- Publicly available information
- Proof of knowledge of information acquired independent of the protected information
- Information received from a third party
- Understanding the scope of the agreement
- The consequences for a breach
- If there are liquidated damages
Situations Where an NDA May be Required
A job can require an employee to sign an NDA. Each business or employer can determine what information they deem as confidential. Some instances of NDAs in the workplace include:
- Silencing victims of harassment
- Encountering confidential information such as:
- Trade secrets, OR
- Proprietary information
7 Key Elements of a Non-Disclosure Agreement
- Names of the parties involved
- Definitions of what constitutes confidential information
- Exclusions of confidentiality
- Statement of appropriate times information can be revealed
- Duration of the agreement’s confidentiality
- Remedies for breaches of confidentiality
- Miscellaneous provisions such as state laws
Understanding what a company or employer is allowed to include in an NDA can often be confusing. It is essential to know the contents of a confidentiality agreement before signing it.
FAQs About Nondisclosure Agreements
Do I need a lawyer when signing an NDA?
Employees should be aware of a legal agreement before signing it. If there are questions about what an NDA contains, one can consult a lawyer. Being well informed about the provisions in an NDA can help prevent mistakes in the future.
If you signed an NDA, can I report sexual assault?
The legality of going public about sexual assault/harassment in the workplace depends on whether the offense was criminal or unwanted behavior. An NDA may not prohibit an individual from reporting sexual assault if it is a crime. However, if the sexual harassment is not criminal, an NDA may stop someone from reporting it.
Related: Nondisclosure Agreements and Sexual Harassment
What happens if an NDA is breached?
If an NDA is breached, one party may seek court action to prevent further disclosures. The offending party can also be sued for monetary damages.
Why is my employer making me sign an NDA?
If asked to sign an NDA by an employer, the business entity likely wants to ensure certain information remains confidential.
Can my employer require me to sign an NDA?
Your employer can require you to sign an NDA as part of the terms of your initial employment. An employer has the right to demand an employee sign an NDA when accessing valuable company information. An employer should not require you to sign a confidentiality agreement protecting information already considered common knowledge in the industry. It is not illegal for a company to require an employee to sign an NDA.
Related: Wrongful Termination Laws in California
Can I be fired if I don’t sign an NDA?
Firing an employee for not signing an NDA varies by state. An employee should understand whether their state is an “at-will employment state” and what the laws on wrongful termination are.
Related: Do I Have a Case for Wrongful Termination?
What information is considered confidential business information?
Confidential business information often concerns processes, operations, styles of work, apparatuses, and trade secrets.
How long do Non-Disclosure Agreements last?
Each NDA is different and can require timelines that span from a couple of days or can be indefinite. Common time frames for NDAs range from one year to ten years.
Are NDAs personal?
Confidentiality agreements are not always personal and are often part of doing business.
If you are unsure whether an NDA or the contents within it are legal, contact one of our attorneys today!
Contact Us
If you or a loved one would like to know more about nondisclosure agreements, get your free consultation with one of our employment attorneys today!