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How do NDAs work?

On Behalf of | Aug 24, 2021 | Business Litigation |

Protecting competitive assets is one of the most important parts of security for a business, no matter the size, industry or market. A popular way of doing this is by keeping sensitive information out of the hands of competitors.

Nondisclosure agreements (NDAs) serve as one popular way to allow businesses to safeguard this information. However, businesses must take steps to ensure that these NDAs are also fair to employees and do not force them to feel trapped.

Concerns with NDAs

Harvard Business Review discusses some of the hurdles that NDAs present. Some revolve around the way it potentially limits employers who eventually wish to leave their current position and seek other possible avenues of employment. For example, NDAs that prevent work in a certain geographical area or industry can end up challenged in court due to interference with the employee’s ability to self-support.

The Society for Human Resource Management states that business owners and managers who employ NDAs need to use them judiciously. For example, NDAs should get included in the onboarding process and not when the employee makes the decision to leave.

Maintaining protection for whistleblowers

Additionally, make sure it protects information and does not ban whistleblowing. One of the biggest concerns about NDAs in recent times is that some employers have used them to quiet employees from bringing to light any wrongdoings that they faced. If a contract involves provisions that an employee could argue in court as a hush or gag order, then the entire contract can actually end up nullified or otherwise put in jeopardy.

Navigating NDAs can still end up tricky even knowing as much as possible, which is why many dealing with them from either end could benefit from an attorney’s aid.


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