As businesses grow, they often find themselves needing to share confidential information with their employees. This confidential information can include anything from trade secrets to client information and other proprietary information. To protect the company`s interests, many employers require employees to sign non-disclosure agreements or NDAs.
An NDA, also known as a confidentiality agreement, is a legal agreement between two parties in which one party agrees not to disclose certain information to any third party. In the context of employment, an NDA generally restricts the employee from disclosing any confidential information that they learn during their employment with the company.
The purpose of an NDA is to protect the company`s valuable information and prevent it from being disclosed to competitors or the public. NDAs can also help in legal disputes if an employee violates the agreement, as it can be used as evidence in court.
If you`re an employer looking to draft an NDA for your employees, you`ll want to include the following key elements:
1. Definition of confidential information: This section should clearly define what information is considered “confidential.” This includes any trade secrets, client information, financial information, or any other proprietary information that the company wants to protect.
2. Purpose: This section should explain the purpose of the NDA, which is to prevent the employee from disclosing the confidential information to any third party.
3. Duration: The NDA should include a specific timeframe during which the employee is bound by the agreement. This could be for the duration of their employment or for a set period of time after their employment ends.
4. Scope: The scope of the NDA should be clearly defined, including the types of information that are covered by the agreement and any exceptions that may be allowed.
5. Consequences of breach: This section should outline the consequences that an employee may face if they violate the NDA. This can include termination of employment, legal action, and financial damages.
To help you get started, here is a sample employee NDA agreement:
NON-DISCLOSURE AGREEMENT
This Non-Disclosure Agreement (“Agreement”) is made and entered into on [insert date], by and between [insert company name] (“Company”), and [insert employee name] (“Employee”).
WHEREAS, the Company has confidential information that is valuable to its business operations and is not generally known to the public; and
WHEREAS, the Employee is being granted access to this confidential information in the course of their employment with the Company;
NOW, THEREFORE, in consideration of the promises and covenants contained herein, the parties agree as follows:
1. Definition of Confidential Information: “Confidential Information” means any and all information disclosed by the Company to the Employee, whether orally or in writing, that is marked as confidential or that the Employee knows or reasonably should understand is confidential or proprietary to the Company. Confidential Information includes, but is not limited to, trade secrets, customer lists, financial information, product specifications, and any other proprietary information.
2. Purpose: The purpose of this Agreement is to prevent the Employee from disclosing the Company`s Confidential Information to any third party.
3. Duration: This Agreement shall remain in effect for the duration of the Employee`s employment with the Company and for a period of [insert timeframe, such as one year] thereafter.
4. Scope: The Employee acknowledges that the Confidential Information is the property of the Company and the Employee shall not disclose any Confidential Information to any third party without the prior written consent of the Company. The Employee shall take all reasonable measures to protect the Confidential Information from unauthorized disclosure, including but not limited to, maintaining the Confidential Information in a secure location and restricting access to the Confidential Information to those who have a need to know.
5. Consequences of Breach: Any breach of this Agreement by the Employee may result in immediate termination of their employment and may subject the Employee to legal action and/or financial damages.
6. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state of [insert state].
7. Entire Agreement: This Agreement constitutes the entire understanding of the parties and supersedes all prior discussions, negotiations, and agreements between them. This Agreement may not be amended except in writing signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.
[insert company name]
By: __________________________
[insert employee name]
By: __________________________
In conclusion, NDAs can be an effective way to protect your business`s confidential information. As an employer, it`s important to ensure that your NDA includes all the necessary elements to provide the level of protection that you need. With this sample employee NDA agreement as a guide, you can ensure that your company`s sensitive information stays safe from prying eyes.