Whether you have just started a new enterprise or have been a business owner for years, you probably sometimes wonder whether non-disclosure agreements are worth the trouble; however, it is unfortunate to work with someone, perhaps even mentoring them for years, and then watch them walk out the door after all the hours and years you invested in them. In many cases you are left with the stress of hiring someone else and going through the training process all over again—as well as dealing with the anxiety of losing trade secrets and more.
You may also have to let an employee go, leaving them disgruntled, and perhaps more inclined than ever to talk. You may also employ or partner with contractors on a routine basis, and must make sure they keep confidentiality in mind after completion of work.
One way that many businesses try to prevent the loss of important information to competitors and others is to have employees and contractors sign non-disclosure agreements. There are many different reasons why these are helpful. You may have something as simple as a marketing campaign that you don’t want others latching on to, or you may be protecting specific products and processes that your company has created. You may have patents pending on an item, or have a new creation in the works. Client lists are often a major concern, along with sensitive data and passwords. And while the non-disclosure can help you keep all the secrets of your business, they must be very clearly outlined in the contract so there is no room for potential ‘misunderstandings’ regarding what could and could not be shared later.
An experienced business attorney will be able to create a concise yet comprehensive NDA for your business. It is important to realize that you cannot pinpoint every single detail of your business to be protected in an NDA but you can outline the specific details you are concerned about, ensuring that the agreement will be enforceable later if necessary.
As with all new employee packets, all documents being signed should be explained—and the importance of the NDA should be emphasized. It is crucial to make sure those working for you understand how serious the confidentiality aspect is, as well as focusing on the details of the NDA. It is pointless to create such a document if the employee does not really understand exactly what they are not supposed to disclose later. If that is the case, information could be divulged later, and perhaps somewhat innocently. With clear communication at the outset, you should stand a better chance of avoiding problems, as well as litigation.
If you need help in creating a non-disclosure agreement or are involved in a business dispute, contact Shane Coons now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com. We can answer your questions and help you make sure your business is protected.