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What Can a Nondisclosure Agreement Do?

People change jobs and they leave a company for any number of reasons. When they go, they can take more than just their skills. Many employees have valuable insider information of the company and this information in the hands of a competitor or other person could be detrimental to the prosperity of the company. A non-compete agreement is an agreement that many employees are asked to sign upon taking a new job. This states that they will not leave the company and go work for a competitor. These are not used in the state of California and a judge will not uphold these even if it has been signed.

Instead, a nondisclosure or a nonsolicitation agreement (NDA) can be used as a type of insurance for business owners. Typically there is some sort of incentive that will be given to a current or former employee in order to persuade them to sign an agreement. A nondisclosure agreement can be implemented to guard the trade secrets of a company. This is important information that can secure the functioning of a company and if it is leaked, there can be numerous ramifications. Trade secrets can include information regarding customers, a new direction for the company, a chemical formula and more. There may be incentive from a competing company for employees to divulge this information but an agreement offers further protection, as well as allowing for penalties if it is broken. The type of agreements used may be mutual or one way and they should be thoroughly developed so that no loops holes allow for secrets to slip out without penalties.

A nonsolicitation agreement is another option and it seeks to limit individuals from soliciting employees or customers to leave the current business. If your business has something to protect, it is important to be proactive and not be faced with a later situation where a lack of planning leaves you at a disadvantage. If you are a worker that is being accused of violating an agreement, speak with a representative from our firm to learn what grounds you have to fight this. Agreements can often be broad and just about everything you learned at the company may be included. This is not always fair to a worker and may not stand up in a court. For those that are looking to develop a NDA or are being asked to sign one, it is best to have it looked over by a professional that can keep your best interest in mind. Contact the Los Angeles business lawyer at our office to learn about the options that you have or fill out a free case evaluation.

Categories: Business Law


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