Confidentiality or Non-Disclosure Agreements

Summary

▪ A confidentiality or non-disclosure agreement (NDA) in an employment contract is valid.

▪ The NDA should cover confidential matters only.

▪ Employees who violate their NDA may be liable for damages.

1. Concept

a. Non-disclosure agreement

A confidentiality or non-disclosure agreement (henceforth, “NDA”) is an agreement whereby one party reveals confidential information to another who is under obligation not to disclose such information to any other persons or entities.

An NDA is valid as a post-employment restriction.

b. Confidential information

Employment contracts with NDAs are usually observed in employment arrangements whereby confidential information may be handled or processed by an employee.

Confidential information may refer to many things depending on how it is defined in the contract. The following are some of the possible coverage of confidential information:

1) Trade secrets;

2) Proprietary information or technology that is not made public;

3) Marketing and/or sales strategies or tactics;

4) Personal information or sensitive personal information of individuals that are being processed by the employer; or,

5) Any data or information that is intended not to be made public.

An NDA should cover confidential information only. Thus, if the information is already public or general knowledge, it cannot be the subject of an NDA.

2. NDA in employment contracts

Employment contracts with NDAs are valid. T...

 



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