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Non-disclosure agreements (NDAs) are employment contracts between employer and employee that serve as a necessary safeguard to protect business trade secrets. Such trade secrets include proprietary information of the disclosing party and any research or knowledge that is not yet patented or copyrighted. There are two types of non-disclosure agreements: unilateral and mutual. The one-party unilateral NDA is the most common. Unilateral NDAs specify employee confidentiality during and after employment and usually includes an expiration date.
Every NDA is distinctive to the business’ needs. Astutely drafted NDAs are more likely to be upheld by the courts. NDAs with overreaching provisions may be ineffective and subject to litigation. So, it is essential that an NDA is precisely customized to the employer’s needs.
The benefits of an NDA diminish the real risk of business ruin. Succinct NDAs stipulate what is confidential. NDAs can encompass a myriad of complex agreements and clauses, but the standard unilateral NDA incorporates:
Confidentiality agreement – The employee will abstain from disclosing trade secrets to future business associates or competitors. It will establish that any research conducted by the employee throughout the duration of employment is also a component of the agreement.
Timeline of confidentiality – The NDA will stipulate whether the agreement is indefinite or will expire.
Non-compete agreement – The employee will refrain from initiating a business that competes with the former employer’s business. This will also deter the employee from selling company trade secrets to competing businesses. Any material or knowledge not yet copyrighted or patented is also contingent upon the agreement.
If the NDA is breached, the breaching employee may be forced to pay restitution. The NDA may also allow attorneys to file an injunction to cease the use of trade secrets from other parties. NDAs are important means of protecting confidential business information provide employers with a sense of security.
At [title], our lawyers will explain the complexities of non-disclosure agreements and how we can execute an NDA tailored to your business needs. We will advocate for your business and establish an NDA that guarantees protection. Contact a DuPage County contract lawyer at 630-474-0925 for a free consultation.
Sources:
https://www.sec.gov/Archives/edgar/data/1289434/000119312510208203/dex99e3.htm
https://www.investopedia.com/articles/investing/041315/how-ndas-work-and-why-theyre-important.asp
https://www.investopedia.com/articles/investing/041315/how-ndas-work-and-why-theyre-important.asp
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