Five Things to Look Out for in a Non-Disclosure Agreement

Use these links to jump to different sections:

• The Definition of Confidential Information
• The Length of Time It Lasts
• The Exceptions to the NDA
• The Law and Jurisdiction That Controls the Agreement
• The Penalties or Consequences of Violating the NDA
• What Can You Do?

It happened. You got the job. And now you’re in the office, presented with a pile of paperwork. Tucked within that pile is an NDA, or non-disclosure agreement. This is a legal contract that creates a structure of confidential materials, communications, information and knowledge between you and your new employer. These are often used to protect trade secrets, new discoveries, budding technologies and other strategic information that’s vital to a business.

The confidentiality agreement essentially states that you will be given such sensitive information, provided you agree to keep it secret from third parties. Makes sense, right? Well, here are some things you should maybe look out for when it comes to an NDA:

The Definition of Confidential Information

In order to be able to agree to the terms of any binding contract, you must know what you are agreeing to. The scope of the sensitive information you may be required to keep confidential must be defined within the document. If an NDA states a scope that may infringe on your future ability to work within your field, you may want to consider the future ramifications that could come by signing.

The Length of Time It Lasts

What would it mean for your future if you weren’t able to disclose any type of information you’re about to learn? Generally, NDAs control communications for a certain period of time from the date you signed the agreement or after you leave the company. Would a decade of silence greatly diminish your value in the marketplace?

The Exceptions to the NDA

There may come a time in which you’re compelled to share protected business information. It happens in the confidential communications of lawyers, doctors, teachers, social workers and any other professions when the justice system becomes involved with confidential information. If exceptions like these are not spelled out in the confidential disclosure agreement, make sure that they are added before signing. To save time and money in legal fees later, be certain that both sides know and agree to a mutual NDA clause.

The Law and Jurisdiction That Controls the Agreement

In any contract there is always the possibility of a disagreement. Any good agreement assures both parties that they will be heard under agreed upon rules. A simple sentence contained within an agreement on the front end can save months of litigation and wasted expense down the line.

The Penalties or Consequences of Violating the NDA

In order for the NDA, non-compete, to have power, it will label what will occur if is a breach. This could include liability for special, incidental or consequential damages that arise from the disclosure of proprietary information.

What Can You Do?

Know that when you are handed any business contract, you have the power to ask for changes. These changes can include: lowering the amount of years the contract is enforceable, preventing the payment of damages, directing any legal action to be in a favorable location to you or your position, and amendments to confusing or poorly worded passages.

If you don’t feel comfortable asking for amendments to a term of the agreement or if the future ramifications of signing a non-disclosure are not clear, you have the option to not sign it. Feel free to investigate potential enforceability issues, and contact a law firm or a reputable and experienced attorney for legal advice and to look over your NDA and make sure your interests are protected. For more information about this area, see our overview on employment law for employees.