7 Crucial Considerations for Non-Disclosure Agreements for Employees

Written by
Rebecca Smith

Jul 26, 2020

Jul 26, 2020 • by Rebecca Smith

There might come a point somewhere in your professional career that your boss will request you sign an NDA. Non-Disclosure Agreements are frequently used to protect trade secrets. You might even be asked to sign one at your initial job interview, and that doesn't leave you much time to go through the fine print. There's no real need to stress, because these NDAs have become routine business protocols. However, signing an NDA is still a serious business that can cause you future concerns, long-term responsibilities, and even the threat of a lawsuit. Keep reading to learn 7 crucial tips for how to handle these documents.

What Exactly Are NDAs?

Non-Disclosure Agreements are written documents that create a legally-binding and confidential relationship connecting two parties. They stipulate specific information that one or both parties consider to be confidential, and they prohibit the other party from ever revealing this information to others.

Employers often mandate employees to sign NDAs since they let a business operate with lower risk at an elevated status. Effective and functional NDAs like those from Net Lawman prime the pump internally for confidential information to flow freely inside an organization. This easy communication lets an establishment enhance their profitability and efficiency without having to worry about that information going public. Businesses aim to keep certain categories of information proprietary and confidential, including but not limited to trade secrets, client lists, marketing strategies, design concepts, technologies, and proprietary relationships. You should keep in mind that an employer will not ask you to sign any NDA because they mistrust you, but simply because they consider it crucial to keeping their business running in a smooth fashion.

You're likely to sign an NDA regardless of your position, whether you're a mid-level manager or a basic office worker. When you next get presented with any NDA, preserve your interests by being ready to analyze it in a calm and deliberate manner.

7 Crucial Considerations Before You Sign An NDA

1) Watch Out For Vague/Broad Terminology: When you do an analysis of an NDA, be sure that there are meticulous definitions of what information is considered confidential or proprietary. Any language that is broad or vague will potentially be used to place unreasonable limits on your power to share or even talk about certain information. Be sure that you protect yourself by excluding four particular categories of potential information from an NDA:

-Information that is available to the public

-Information you might attain on your own or just already have

-Information you can establish that learned independently of the protected information

-3rd-party sourced information

2) Comprehend The Scope Of The Document: Look at what in particular the NDA wants you to keep confidential. Also, consider how long they want you to keep it that way. What kind of knowledge is the NDA prohibiting from disclosure? What do you have to do to keep such information a secret? How long after leaving will you be expected to maintain the privacy of the information?

3) Breach Consequences: Beware of any unfair or extreme consequences for an NDA breath. Consider how proportional the potential punishment is, and if it seems too far, don't sign the NDA. Also, avoid signing an NDA that weighs too heavily towards the favor of one party over another. Avoid an NDA that would hold you responsible for third-party breaches, which might include fellow employees, unless there is a balancing provision.

4) Timing Your Signature: All contracts are based on certain elements, and consideration is one of them, which is when two parties bargain for an exchange of value. It's common to sign an NDA when or before you even start work; in such cases, your employment is the consideration due to you. Things get complicated if you're requested to sign any NDAs after you've already started. You might have the right to 'new' consideration, which could manifest as employee benefits like promotions, bonuses, and extra vacation days.

5) Liquidated Damages Provision: If you see this, do not sign the NDA. Turnaround and walk away. Provisions like this let your employer collect specific damages that are paid directly to them, and they don't even have to prove you were personally a direct cause. Most provisions like these are oppressive in nature. Don't let your employer have an automatic way to recover money for things you might not even personally do to them or against them.

6) Negotiate: Never fear asking about altering document terms if you think something is out of whack. Asking never hurts, and businesses are known to make alterations to NDAs they drop on you out of the blue. Layout your worries about specific provisions, get clarifications, and find a middle ground.

7) Trust Your Instinct: If you think something about the Non-Disclosure Agreement is hinky, then it likely is. Have a lawyer look over your NDA and contract. It might seem like a waste of time and money, but it's an investment that can spare you a lot of misery down the road. Preventing a lawsuit is always worth it. Always be ready to walk away if you're not comfortable singing something.

NDAs are crucial to any business or organization wanting to protect the information they consider confidential and proprietary and in a lot of ways is good in terms of corporate responsibility. Never open the door to future stress or lawsuits because you unintentionally reveal something from 10 years and four jobs in the past. NDAs might seem intimidating, but using these 7 crucial considerations when you are next presented with one will help you protect yourself financially and legally.

It's tempting to just trust your boss and sign it to keep him or her happy, but it's not smart for you. So, always take your time and follow the guidance above when signing an NDA before you start a new job. It can make all the difference if there is an issue further down the line regarding confidentiality and privacy.