Looking Out For Your Career

Everything you need to know about non-disclosure agreements

On Behalf of | May 10, 2021 | Non-Disclosure Agreement

If you are going through the hiring process and your new employer asks you to sign a non-disclosure agreement, you should understand what you are signing before putting pen to paper. The purpose of the agreement is to ensure employees do not share confidential information with other parties. 

If you do not read closely what the terms of the agreement are, the company you work for may be able to take legal action. 

Common non-disclosure information

According to FindLaw, a non-disclosure agreement is a legal contract between two parties to outline specific secret information that an employee or client may not disclose to others. There can be NDAs in a variety of industries, including business, technology, finance, health care and oil and gas.  

A common reason for an NDA is to protect trade secrets. An employer may also introduce a non-disclosure agreement to protect client information or valuable, sensitive information of the company.   

Typical inclusions of a non-disclosure agreement

An NDA may have specific terms related to a company, but some basic elements include: 

  • Explanation of the secret information the NDA is addressing 
  • Start and termination dates of the NDA 
  • Obligations of the employee 
  • Implications for breaching the contract 

The contract must also include any exceptions to confidentiality. Some of these clauses include the discovering of the information by the employee prior to involvement with the employer, public domain information or disclosure of the information by a third party not involved in the confidentiality agreement. 

Consequences of breaking an NDA

According to PBS Frontline, if an employee divulges information involved with a non-disclosure contract, there may be consequences. For giving up trade secrets or sensitive client information, an employer can sue the employee for financial and suffering damages. However, if an NDA covers more personal matters, such as sexual harassment or assault, a judge may declare the contract void.