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What should I know before I sign an NDA?

On Behalf of | Jul 15, 2021 | Employee Rights, Employment Law for Employees |

Non-disclosure agreements occupy a unique space in employment law. What makes a non-disclosure agreement unique is that the parties typically do not invoke it until after either an employee or employer terminates the working relationship between them.

Generally speaking, non-disclosure agreements protect the confidentiality of secrets that employers hold. According to FindLaw, in the event that the employee discloses confidential information without the employer’s permission, a non-disclosure agreement allows the employer to sue the employee.

What are the different kinds of non-disclosure agreements?

There are two varieties of non-disclosure agreements: mutual and one-way agreements. With a mutual non-disclosure agreement, both parties to the agreement are disclosing confidential information to each other. Mutual non-disclosure agreements are rarer. For instance, if an inventor discloses his invention to a company in exchange for the company’s private client lists, this may involve a mutual non-disclosure agreement.

The one-way non-disclosure agreement is more common. This is when an employer requires an employee to sign a non-disclosure agreement in exchange for employment.

What is ‘confidential information?’

Every non-disclosure agreement is different. Your particular contract must specifically define what ‘confidential information is within the scope of that particular contract. Usually, a non-disclosure agreement will also mention what information the agreement excludes. For example, a nondisclosure agreement can not protect any information that the employee discovers prior to or is independent of the non-disclosure agreement retroactively.

Additionally, the non-disclosure agreement should state the obligations and duty of the employee regarding the information. The agreement should state what exactly the employee is responsible for regarding safekeeping the information. It should also state how the employee can use the information legally.