Why do I need to sign a non-disclosure agreement?

Why do I need to sign a non-disclosure agreement?

If you have been recently hired for a new position, your employer may ask you to sign a non-disclosure agreement along with or within your Employment Agreement. A non-disclosure agreement (NDA) is a contract that affirms the employee will not share any confidential information about the employer or company.

Confidential information is any data that is not released to the public and is strictly private. The employer may have a concern that other competitors can learn about their company’s methods, or they could have a privacy agreement with their clients. Confidential information could include client names, financial reports, marketing schemas, proprietary knowledge, contracts etc.

These agreements are provided to employees in situations where the employee is likely to be presented with private information, and if shared, could have a negative impact on the company. The purpose of this agreement is to protect the employer and discourage the employee from ever exposing this information.

What should be expected in an NDA?

The agreement will first outline those entering the contract, the confidential information that must remain private, and the responsibilities the employee will accept to ensure all details remain private. The responsibilities will include understanding how confidentiality can be broken, for example, by verbally sharing information or disclosing information before the NDA was signed. The contract will also disclose who this data may be shared with, or who already is made aware of this information. Further, the NDA will include how long this agreement will last.

If the employee shares the confidential data, they could face consequences for the damages they caused by sharing. The NDA can include the terms of the legal recourse or actions that will be taken if the agreement is broken by the employee.

The NDA will not outline the protection of information that has already been made public. If certain aspects of the company must remain on public record, then it cannot be protected.

How could the NDA affect the employee?

This type of agreement is regularly enforceable in the court. If the agreement is outlined accurately, is reasonable, and used for an authorized purpose, the employee could fairly face legal penalties. It is important for the courts to maintain NDA’s because they believe it creates a positive impact when businesses can build and modernize in their field without the anxiety of other companies stealing their methods.

If you are an employee who needs their Employment Agreement revised before accepting a new position, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.