Employee Non-Disclosure Agreement | NDA | Trade secrets

How to use an Employee Non-Disclosure Agreement

An Employee Non-Disclosure Agreement facilitates the sharing of confidential business information and trade secrets between the employer and employee.

1. What is an Employee Non-Disclosure Agreement?

An Employee Non-Disclosure Agreement (“NDA”) facilitates the sharing of confidential business information and trade secrets between the employer and employee.  Under the NDA the employer shares confidential information to the employee and the employee keeps the said information confidential and promises not to disclose the same.

An NDA helps the business because it allows the employer to freely share confidential business information with employees as necessary for them to perform their job. Simultaneously, the employer can expect the employees to keep such information confidential and to not disclose the same under threat of legal action.

An NDA contains basic terms such as (1) what is defined as confidential information; (2) what is excluded from the definition of confidential information; and (3) under what circumstances the confidential information may be disclosed. With Legal Tree you can create an NDA with only the most basic terms or you can make it as detailed and complex as needed for your business.


2. When do you need an Employee Non-Disclosure Agreement?

An Employee NDA is necessary whenever the employer hires a new employee and expects to share confidential business information and trade secrets to the employee. The agreement is normally executed at the start of the employment relationship and helps build trust between the employer and employee.


3. How can an Employee Non-Disclosure Agreement protect you?

Employees will necessarily receive confidential business information and trade secrets as part of their job.  An Employee NDA protects the employer by maintaining the confidentiality of such information and preventing leaks to 3rd persons, particularly competitors.  The agreement also allows the employer to hold employees accountable for any breach of the NDA by resorting to legal action.

If the employee violates the NDA the employer can resort to legal action and (1) file an injunction suit (to prevent the unauthorized disclosure of confidential information); (2) claim damages; and (3) claim any other penalty as agreed upon in the NDA.  The breach of the NDA may also be a ground to terminate the employment relationship.


4. What information do you need to create the Employee Non-Disclosure Agreement?

To create your Employee NDA, you’ll need the following minimum information:

  1. The type of employer (i.e. individual or business) as well as name and details (i.e. nationality and address)
  2. The name and details (i.e. nationality and address) of the employee
  3. The consequences for violating the NDA.

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