What is an employee NDA?

On Behalf of | Dec 22, 2021 | Employment Law |

In order to maintain their reputations and status in the business world, employers may have to keep many aspects of their business confidential. One way to ensure this confidentiality is to require employees to sign non-disclosure agreements, or NDAs. NDAs are legally binding agreements that employers may require in a variety of circumstances. Some examples include:

  • An employer asks a newly hired employee to sign an NDA to keep company trade-secrets, marketing strategies, client lists, and other information confidential.
  • An employer and employee agree to a settlement agreement following sexual harassment allegations, and the employer asks the employee to sign an NDA to keep the terms of the settlement agreement and details of the harassment/workplace practices confidential.
  • An employer requires a terminated employee to sign an NDA to keep the details of their severance agreement confidential and protect the employer from future lawsuits.

While an NDA can be used in various circumstances, it cannot be used to protect information that is considered common knowledge or part of the public record. It also cannot be used as a shield to protect employers engaging in illegal or unethical behaviors.

Violating the terms of an NDA

If an employee breaches an NDA, the employer may choose to take legal action against them depending on the severity of the breach. However, an employer may choose not to take action against the employee to avoid further harm to the company’s reputation.

NDAs are an essential function of the business community to protect both the rights of the employer and the employee. If you are asked to sign an NDA or are accused of violating the terms of an NDA, consulting with an attorney specializing in employment law may be beneficial.