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What is a non-disclosure agreement?

On Behalf of | Feb 6, 2023 | Business Litigation |

Many businesses, despite their size or industry, conceal inside information that protects their products and operations. These trade secrets tend to vary widely across many different types of businesses, and employees may have to sign non-disclosure agreements to keep important information private.

According to Adobe, a non-disclosure agreement constitutes a promise to keep a trade secret. The more employers understand the many facets of an NDA, the more precise and functional these documents may be.

The purpose of an NDA

An NDA usually covers a variety of a company’s trade secrets. While they may vary from industry to industry, they can include many items, including:

  • Creation processes
  • Wage/salary information
  • Information regarding upcoming products

Employers and business owners can add whatever they feel qualifies as sensitive or secret information within an NDA; however, it is important to brief employees thoroughly on this document before they agree to sign it.

NDA inclusions

Employers who choose to use an NDA can help their employees feel more confident about meeting its terms by reviewing the inclusions within the document. This may cover specific company information, who the NDA includes and the overall importance of protecting sensitive information.

The consequences of breaking an NDA

Before employees agree to the terms of an NDA, employers may want to review the documents with any new hires so they understand the possible consequences of revealing any insider secrets. These can include employment termination, fees and possible legal action if the disclosure results in a loss of profits, present or future.

Employers may want to examine and update their non-disclosure agreements annually to ensure the information contained within remains relevant.


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