Employee Non Disclosure Agreements (NDAs) in Massachusetts
Understanding Non-Disclosure Agreements (NDAs)
When faced with an employment contract, it's highly probable it will incorporate a Non-Disclosure Agreement (NDA). NDAs restrict you from disclosing your employer's trade secrets or confidential information beyond your employment with the company.
An NDA safeguarding a company's confidential data is a common provision, and, for the most part, enforceable. However, NDAs that pertain to the disclosure of sexual harassment or harassment settlements are a separate matter, and discussed here.
Before signing an NDA designed to protect your employer's confidential business data, there are crucial aspects you should grasp. We've compiled a list of questions you should consider asking an employment attorney before putting pen to paper.
What Is a Non Disclosure Agreement
Non-disclosure agreements, often referred to as confidentiality agreements, safeguard an employer's trade secrets and other confidential information that might not meet the legal criteria of a trade secret.
Such confidential information can encompass customer lists, financial data, and technical information. Generally, you'll be required to agree not to use or disclose this information outside your employment. Additionally, you'll need to commit to returning any company information or property when your employment ends, and refrain from using or disclosing it thereafter.
While you must protect information meeting the legal definition of a trade secret, an NDA extends protection to proprietary data that may not qualify as a trade secret.
Enforcement of Non-Disclosure Agreements (NDAs)
An NDA constitutes a legally binding agreement, albeit without the same level of scrutiny as a non-compete clause. It solely restricts the use of information rather than overall competition.
Typically, the agreement will specify that the employer is entitled to injunctive relief in the event of a breach. This means they can request a court to issue an immediate order compelling you to cease using or disclosing the confidential information, and seek financial damages if your actions have caused them harm.
Sometimes, the agreement includes a "liquidated damages" provision, indicating a predetermined amount you agree to pay upon breach. Courts will uphold these provisions if they are reasonable and proving actual damages would be challenging.
Additionally, your agreement may feature an attorney's fee provision, indicating that, should the employer prove a breach, you'll be responsible for their legal fees and expenses.
NDA Timeframe Considerations
Unlike non-compete agreements, NDAs do not necessarily require a specified reasonable timeframe. Many NDAs lack an end date altogether, which is generally acceptable under the law. However, if significant time has passed since your departure from employment, the value of the proprietary or business information that the company aimed to protect may have diminished.
Non-Disclosure Agreements and Non-Confidential Information
While employers have broad latitude in protecting their information through a legal contract, certain areas cannot be protected. These include:
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Wondering About the Effect of Your Nondisclosure Agreement?
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