When your business hires a new employee, the last thing you as a business owner want is for your new employee to learn your company’s trade secrets and other confidential information and then leave to work for your competitor. Without a nondisclosure agreement (NDA), your new employee can be an attractive target for the recruiting efforts of your competitors who are eager to learn confidential information about your business. Generic NDAs are almost always of little use to business owners – even if these agreements are found to be enforceable by a court (and expensively too), an NDA not tailored to your business cannot provide the maximum benefit of these agreements.
What to Include in Your Non-Disclosure Agreement
Before placing a NDA in front of your new employee and expecting that it will protect your business, be sure your NDA includes the following terms and conditions:
- Definition of “confidential information”: Although it may seem obvious, a NDA that does not describe your “confidential information” and trade secrets will do little to protect your business. While the agreement need not specifically list the pieces of confidential information that the employee should not share, it should describe the term “confidential information” in sufficient detail so that the new employee is given adequate notice as to the nature of information he or she must not share with others.
- A specific term in which the NDA is effective: If your business’s secrets include information that will always be considered confidential (like the secret formula for a beverage or a search algorithm, your NDA may need to specify that the employee is forbidden from disclosing the information indefinitely and the policies and procedures the employee is required to follow to prevent unauthorized disclosure. Conversely, if the confidential information will be released to the general public at some point in the near future, your NDA may only need to last for a few years.
- Remedies or other enforcement mechanisms: Despite your new employee’s statements to the contrary, there is a chance that he or she will violate the terms of your NDA. (There is even a name for it, ‘inevitable disclosure.’) For such events, your NDA needs to specify what relief or compensation you will be entitled to recover should a breach occur. The remedies available for a breach of an NDA may include monetary damages to compensate your business for the harm it suffers as a result of the leak of confidential information as well as fees such as attorney’s costs incurred in bringing an action to enforce the NDA.
When to Contact a California Business Law Firm
JGPC Law assists business owners in drafting and executing enforceable NDAs that protect your business’s assets and intellectual property in Fremont, Walnut Creek Hayward, Tracy, Livermore, San Ramon, Manteca, San Leandro, Oakland, and Pleasanton area. Our experienced legal team will consult with you to learn your business’s needs and then craft a customized NDA specifically tailored to meet those needs. Contact JGPC Law today at (925) 463-9600, or contact our firm online for prompt legal assistance and counsel.