A nondisclosure agreement is one that you can have your employees sign to state that they will not share information about your business with others. This helpful legal document helps you make sure that your business’s secrets and ideas won’t be stolen by those who have worked for you.
This is particularly important if someone you hire is prone to being poached by another competitor. For example, if you have someone working for you on your computer system and network, you may want to have them sign a nondisclosure agreement so they can’t take information about your proprietary software to a competitor.
Nondisclosure agreements give you an option to seek compensation
Usually, nondisclosure agreements specify what someone may not share with a competitor or other business. If they violate the nondisclosure agreement and your trade secrets are exposed, then you can file a lawsuit against that individual for violating the contract.
Can a nondisclosure agreement be for an indefinite length of time?
Yes, usually, even though there may come a time when the information the person had access to may become out of date. For example, if you have just created some new software for an artificial intelligence system, then you may decide to have anyone working on it sign a nondisclosure agreement with an indefinite length. This software may be so new that it will take years to get it to market, so it makes sense to have such a long nondisclosure agreement.
What happens if someone breaks a nondisclosure agreement?
If someone breaks a nondisclosure agreement, they may be liable for any damages that they cause. In some instances, criminal charges could also be filed, though this is largely a civil issue.
Usually, someone who breaches an NDA will face a lawsuit, and the penalties you can seek as a victim include those commensurate with the lost profits you’ve faced as a result.
If you believe one of your past employees, an investor or another party has violated your nondisclosure agreement, it’s important to take steps to look into your legal options and pursue the remedies available to you.