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What is a Non-Disclosure Agreement (NDA) in Employment Law?

Non-disclosure agreements, also known as NDAs, are a commonly seen tool in many aspects of business law, but one of the places they are most often seen is in employment contracts. There, they are used to protect the interests of employers, as well as their clients or customers, but can also be used to silence employees complaining about poor working conditions. But what exactly is an NDA, and how are they used in an employment context?

 

What is an NDA? A non-disclosure agreement (NDA) is a type of contract that is commonly used by employers to protect against public disclosure of sensitive or confidential information. This might include trade secrets, proprietary information, information about clients, market data, or any other information that might damage the employer if it were made public. When an employee signs an NDA, they are promising not to disclose any of the described information to anyone who is not supposed to know it. Why Might You Need to Sign an NDA? NDAs are commonly seen in jobs where employees commonly work with sensitive or valuable information, such as research and development of new products, marketing research, or finance. It also includes jobs that handle personal identifying information of clients, or who deal with legally protected information, such as legal or medical data. Employees may also be forced to sign an NDA if they are involved in a dispute with their employer, as part of a settlement or judgment. What Happens if You Violate an NDA? If you violate an NDA, your employer may be able to bring a lawsuit against you for violating the terms of the agreement. Common charges seen in such a lawsuit include things like: breach of contract, violation of fiduciary duty, disclosure of trade secrets, and infringement on intellectual property rights, depending on the nature of the disclosure. These lawsuits are meant to recoup damages resulting from the disclosure, but more importantly, they are meant to intimidate employees into not discussing things they saw or experienced. Can an NDA Be Enforced Against You? Thankfully, not every NDA is necessarily enforceable. Many employers have a bad habit of making NDAs overly broad, for example, and attempt to enforce it against disclosures that are not actually confidential or sensitive in nature. Also, employers cannot use an NDA to prevent an employee from reporting illegal conduct, or from reporting something they have a duty to report. If you are unsure whether an NDA may affect your ability to discuss certain subjects, you should speak to a lawyer with experience handling employment law matters. Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer with more than 41 years’ experience handling the many aspects of employment law. His new book, “Fired!: Protect Your Rights & FIGHT BACK If You’re Terminated, Laid Off, Downsized, Restructured, Forced to Resign or Quit,” is available in hardback, and contains valuable advice on dealing with employment and labor law issues. To purchase the book, feel free to contact Steven Sack at 917-371-8000 or visit the website at legalstratpub.com. To inquire about a legal matter, please feel free to contact attorney Steven Sack at 917-371-8000 or stevensackatty@hotmail.com.

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