If you have been in just about any business for long enough, there is a chance that you have heard of non-disclosure agreements, also known as NDAs. These surprisingly common legal agreements play a key part in many businesses, even though they are not always well understood. But what exactly is an NDA, and how might it be able to benefit you and your business?
What is a Non-Disclosure Agreement?
In simple terms, a non-disclosure agreement or NDA is a type of contract between two people to avoid publicly discussing certain sensitive information or subject matter. They are commonly used in an employment context when an employee will have access to a company’s trade secrets, or when they work with confidential client information. They can also be used as a part of a litigation settlement to keep both parties from discussing any information related to the lawsuit.
What Are the Benefits of an NDA?
The primary benefit of an NDA is that it allows you to better protect the sensitive information your company may deal with on a day-to-day basis. This includes any information related to research and development of new products, marketing data, intellectual property, and confidential information related to your clients. If this information is improperly disclosed, the NDA gives you the legal tools you need to protect your company.
What Are the Limits of an NDA?
That being said, there are some limits on what an NDA can legally accomplish. For example, it cannot be used to prevent an employee from disclosing potential illegal activity they may have witnessed to a government authority, and a court may invalidate an NDA whose terms are considered overly restrictive. However, in most other cases, an NDA can be highly effective at protecting the information that is most valuable to you as a company.
What Should You Do?
Ultimately, the question of whether an NDA might be necessary for your business depends on your circumstances. That is why you should speak to a lawyer with experience handling business law matters, including drafting NDAs. They can analyze your company’s needs and ensure that your contracts serve your interests.
If you have a business law issue, give the Law Office of Andrew Ross Sack a call. Andrew Ross Sack is a New York and New Jersey business lawyer who has considerable experience in handling the many aspects of labor and employment law. To schedule a consultation with New York City/Long Island/Westchester employment lawyer Andrew Ross Sack, call (516) 526-3319 or visit his contact page.
