How Employers Use Nondisclosure Agreements

How Employers Use Nondisclosure AgreementsHow Employers Use Nondisclosure AgreementsA nondisclosure agreement is a written legal contract and is usuallybetween an employer and an employee. The contract lays out binding terms and conditions that prohibit the employee from disclosing confidential and proprietary company information. For the agreement to be legally binding, the employee must receive something in return for signing itemployment in this case. Nondisclosure agreements are also known as nondisclosure, (NDA), confidential disclosure agreements, secrecy agreements, proprietary information agreements, andconfidentiality agreements. An NDA is in effect for the duration of an employees employment and for a period of time following employment termination. To be enforceable, a nondisclosure agreement must be protecting information that is both confidential and valuable. Other Instances When Nondisclosure Agreements Are Used In other circumstances where an employer is intereste d in keeping confidential and proprietary company information private, a nondisclosure agreement may be instituted. Using an NDA under some of these circumstances requires a leap of faith by the employer who may not know all the individuals who are involved in the conversation. However, by using a bindinglegal document, the employer would have some recourse if confidential or proprietary company information welches shared. The occasions for which an employer will want to use a nondisclosure agreement include NDAs for Management and Senior Level Job Interviews Any interviews where confidential companyinformation is discussed with the candidate as it is nearly impossible to hire a senior staff person without discussing highly confidential information. Without the discussion, the employer and candidate would not be able to identify whether the candidate fits the job. Consultant, Contractor, and Vendor Nondisclosure and any products that result from the contractual work performe d forthe company. Along with any other proprietary information sharing to determine whether the vendor has the capability and capacity to produce the necessary product. Situations Involving Stock or Company Purchase These include any interaction during which confidential information is shared. During due diligence, any person who must review confidential company information is required to sign a nondisclosure agreement. It includes accountants, company owners, product review senior employees, and so forth. EmployerBenefits Employers benefit from nondisclosure agreements because they keep these parties from sharing with competitors any proprietary knowledge, trade secrets, client or product information, strategic plans, or other information that is confidential and proprietary to the company. Nondisclosure agreements state that the signer cannot disclose or in any way profit fromconfidential company information supplied to them. Nondisclosure agreements frequently claim compa ny ownership of anything that is developed, written, produced, or invented during or as a result of employment, contracts, services, or interviewing if it is in any way related to the scope of the companys business. A nondisclosure agreement should offer a clause that allows an employer to sign off on or give permission to the signer to use company proprietary information. It allows employees some latitude to participate in activities such as starting a business or becoming a supplier to their former employer.