Non-disclosure agreements (NDA), also known as confidentiality agreements, are legal contracts that outline confidential material, knowledge, or information that the parties wish to share with one another for certain purposes but wish to restrict access to. They are typically used to protect confidential and proprietary information. An NDA can be a useful tool when two parties intend to do business together and need to gain insight on how each one operates but want to protect themselves from this information becoming public knowledge, especially should the deal fall through. Sometimes an employee can be required to sign an NDA or NDA-like agreement with an employer, protecting trade secrets. In fact, some employment agreements include a clause restricting employees' use and dissemination of company-owned confidential information. In legal disputes resolved by settlement, the parties often sign a confidentiality agreement relating to the terms of the settlement.
Some employers ask new employees to sign noncompete agreements, in which the employee agrees not to start a competing business or go to work for a competitor for a stated period after the employment relationship ends. Noncompete agreements are a complex subject, as they are disfavored in some states and downright disallowed in others. Even states that recognize these agreements won't enforce a noncompete that lasts too long, covers too wide of a territory, or otherwise places too many limits on an employee's right to move on to greener pastures without leaving his or her chosen profession.
A non-solicitation agreement is a contract in which an employee agrees not to solicit a company's clients or customers, for their own benefit or for the benefit of a competitor, after leaving the company. A non-solicitation agreement can also include an agreement by the employee not to solicit other employees to leave when he or she quits or otherwise moves on. States differ in their treatment of non-solicitation agreements. While most states insist that these agreements are reasonable in their scope, others disfavor them outright.
Schedule a consultation with our attorneys to find out what agreements your business is or is not allowed to present to the prospective or current employees to sign; we’re also happy to draft these agreements for you. If you are an employee, consult us to learn if your rights have been violated, or if you’re bound by the agreement you’ve signed.