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Non Disclosure Agreement (NDA)
Employee Confidentiality Agreement for Employees

An NDA for Employees is a non disclosure agreement between the employer and the employees not to disclose trade secrets without permission of the employee. This can also be covered in employment agreement. It can also include if employee creates anything on the job that belongs to the company. It is advised to get this agreement in the starting of the employment but if done with the existing employee than he must be offered some benefit over and above his salary.

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How to use Employee Confidentiality Agreement?

We are giving a NDA for employees format which can be used by the employer of the company to draft a non disclosure agreement. This can be either drafted on a plain paper or can also be drafted on the stamp paper as per your requirement as an employer. The employee has to sign on the copy of it and return it back to the employer.

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You can choose which document you want us to draft by our experienced lawyers with a free consultation call to understand the significance and get the document customized as per your business requirement.

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Understanding a NDA

The NDA serves a purpose in a variety of situations. NDAs are generally required when two companies enter into discussions about doing business together but want to protect their own interests and the details of any potential deal. In this case, the language of the NDA forbids all involved from releasing information regarding any business processes or plans of the other party or parties.

ome companies also require that new employees sign an NDA If the employee has access to sensitive information about the company.

NDAs are also commonly used before discussions between a company seeking funding and potential investors. In such cases, the NDA is meant to prevent competitors from obtaining their trade secrets or business plans.

Special Considerations

In all of the above, the information that is being protected may include a marketing strategy and sales plan, potential customers, a manufacturing process, or proprietary software. If an NDA is breached by one party, the other party may seek court action to prevent any further disclosures and may sue the offending party for monetary damages.

The Non-Mutual Agreement

This type of agreement usually applies to new employees if they have access to sensitive information about the company. In such cases, the employee is the only party signing the agreement that is prevented from sharing confidential information.

The Disclosure Agreement

Increasingly, individuals are asked to sign the opposite of a non-disclosure agreement. For example, a doctor may require a patient to sign an agreement that the patient's medical details may be shared with an insurer. This provides one party with the authority to share personal information and prevent them from being sued for doing so.

Requirements for a NDA

NDAs may be customized to any degree but there are six major elements that are considered essential:

  • The names of the parties to the agreement
  • A definition of what constitutes confidential information in this case
  • Any exclusions from confidentiality
  • A statement of the appropriate uses of the information to be revealed
  • The time periods involved
  • Miscellaneous provisions

Advantages & Disadvantages of a NDA

The primary benefit of an NDA is that sensitive information regarding your company is kept secret. This can be anything from research and development (R&D), possible future patents, finances, negotiations, and more. Signing an NDA is a way to protect private information from becoming public.


NDA agreements are also clear. They specify what and what cannot be disclosed to avoid any confusion. NDAs can also be created at a low cost as they are really just a signed piece of paper. This is one of the most cost-effective ways to maintain private information.

NDAs also outline the consequences of disclosing prohibited information, which should prevent any leaks. Furthermore, NDAs are a good way to maintain comfort and trust in a relationship.

  

When entering into a non-disclosure agreement, make sure that confidential information and trade secrets are distinguished from each other. The latter usually has an indefinite period of confidentiality.

One of the primary disadvantages of an NDA agreement is that it starts a relationship off on the idea of mistrust. This can set the tone of the relationship and may not always result in a positive one. Employee NDAs can also prevent top-tier talent from joining your firm, knowing they'd be limited in discussing their job in the future.


Similarly, asking current employees to sign NDAs when working on special projects may sour their experience of working for the company as they will feel less trusted. NDAs can also result in potential lawsuits if breached, becoming a headache for everyone involved.


Pros
  • Information kept private

  • Clarity on what information can and cannot be shared

  • Low cost to create

  • Outlines consequences


Cons
  • Can create an atmosphere of mistrust

  • Risk of deterring top-tier talent from joining the firm

  • Can possibly sour the relationship with current employees