The unprecedented nature of the times made people cautious about leaving a job if they could work from home during the pandemic. However, now it seems an all-too-common occurrence that someone will leave or left the company. Whether they opt to move to a competitor, start their own shop, or make maple syrup in Vermont, it is still smart to make sure they sign a non-disclosure agreement (NDA) if they have not done so already.
NDAs are an essential part of many business relationships for many reasons. They can protect intellectual property, proprietary information or company secrets. More than that, this legal handshake also outlines how business partnerships share information and provides strong foundation guidelines, including what happens if one party violates the agreement.
Reasons to use an NDA
Common examples include:
- A company believes its best practices give it an advantage.
- A company may have new products or services coming to market.
- A company does not want details of sales contracts and client information to leak.
- A company wants to protect special formulas, secret sauces or unique recipes.
What they do not cover
Companies cannot use an NDA to cover up illegal activity, nor are they used to protect information that is already common knowledge. Companies also cannot use an NDA for information the former employee accumulated before or after terms of the contract, outside of work or the scope of the agreement.
Drafting a strong NDA
An agreement has the best chance of holding up in court or being enforced when it is not unduly harsh with unrealistic expectations. Businesses often turn to attorneys who draft these agreements. These legal professionals can help balance the needs of protecting the client’s best interests by not making it overly restrictive and not binding. They can also represent the client’s interests if there is a dispute regarding NDA.