Red Flags in Non Disclosure Agreements

Some non-disclosure agreements contain additional clauses that you should pay attention to, read carefully, and even send to a lawyer for further explanation: Beware of overlapping confidentiality obligations: As mentioned above, it is important to pay attention to duplicate confidentiality obligations that affect the same information. In some cases, one party may propose that each party sign the other`s NDA. In other cases, a party may try to keep a confidentiality agreement alive after the conclusion and signing of a service or other agreement. You should avoid the different confidentiality obligations governing the same agreement, as this can easily lead to a major dispute over the contractual obligations and provisions applicable in the event of disclosure, which distracts you from the actual breach of your confidential information. There are many legitimate reasons why you have been asked to sign a Non-Disclosure Agreement (NDA) – and there is usually no problem signing one. Some of the most common situations include: These non-disclosure agreements tend to be niches and are probably only found in specialized fields. The non-disclosure agreement must identify the parties to the agreement and who is the disclosing party or the party sharing the information and the recipient. The names and addresses of the parties must be indicated. The purpose of a non-disclosure agreement (NDA) is to allow two parties to conduct business while ensuring that all information exchanged remains confidential. Pay attention to your obligations to return or destroy: Most confidentiality agreements require a recipient to return or destroy the discloser`s confidential information upon request or upon termination. Sometimes the revealer can choose between return and destruction, sometimes the receiver.

To ensure compliance, be sure to internally restrict the disclosure of confidential third-party information and track who has access to it or copies thereof. Without tracking this information, it is very difficult to ensure return or deletion when the time comes. The second most important aspect of any non-disclosure agreement is the document definition of confidential or privileged information. Essentially, what information can be freely shared and what information absolutely cannot? Perpetual agreements: If the duration of a confidentiality agreement is “eternal,” you need to ask a few questions. For example, things are changing rapidly in the world of technology, and what may be confidential information today will not be confidential tomorrow. However, you may be held liable if you disclose information or data already known to the public. A non-disclosure agreement should be limited to the disclosure of confidential information. This makes it a non-disclosure agreement. Any document that claims to be a “non-disclosure agreement” but contains significant intellectual property obligations (e.B the claim that everything discussed is shared property) should be a wake-up call.

Non-disclosure or confidentiality agreements come in a variety of forms and styles, and they should always include provisions that cover non-use by the receiving party – not just a restriction on the disclosure of this information to third parties. Many NDAs you come across can be signed as is, but you often get one that contains offensive terms. This simple guide will familiarize you better with the basics and help you spot common red flags. Remember the “confidentiality period”: most NDAs have a defined period of time during which confidentiality obligations apply to confidential information. After this period, your data will no longer be considered confidential by the other party. If you disclose trade secrets, it is important that they remain confidential forever or until the information becomes public (except due to a violation of the NDA). Also consider language that requires the other party to securely dispose of your confidential information when there is no longer a business or legal need for them to possess it. There are additional clauses to watch out for in a non-disclosure agreement, including: Add the language required for employees, independent contractors, and NDA consultants: In 2016, Congress passed the Trade Secrets Defense Act (DTSA), which, among other things, grants immunity to whistleblowers who disclose a company`s trade secrets as part of reporting an alleged violation of the law to a government agency. It also allows the disclosure of trade secrets to the whistleblower`s lawyer and, in certain circumstances, as part of a sealed retaliatory action. It also requires companies to inform their employees, independent contractors, and consultants about the protection of DTSA whistleblower immunity (or a cross-reference to the company`s reporting policy for violations of the law). Companies that do not provide this notice or reference may not be able to recover exemplary damages or attorneys` fees from an employee, independent contractor or consultant for misappropriation of trade secrets. Make sure their confidentiality agreement templates for employees and independent contractors include a notice or reference that meets the requirements of the DTSA.

Ultimately, the goal of NPAs should be fairness to the company and anyone with access to confidential information. If you don`t see red flags, it`s probably okay to sign it. If you have any questions, ask for explanations or get legal advice. Most employment contracts in Georgia are fairly standard. Employers want to protect their organizations and avoid possible lawsuits from employees. This does not mean that you have to blindly sign every contract that an employer presents to you. Always read the fine print before signing on the dotted line. And if you see any of the following red flags, you may want to speak to a qualified labor lawyer in Atlanta before proceeding.

As always, contact a lawyer with expertise in non-disclosure agreements (and with a business-oriented approach) to ensure that your business, its confidential and proprietary information, and trade secrets are properly protected. Before you even consider signing a non-disclosure agreement, the first thing you should look at in the document is the cost of the breach. If disclosure may be required, i.e. your legal right to “whistleblowing”. Keep them fair and balanced: While you always try not to get bogged down in contract negotiations, this is especially true for NDAs that typically enter into a relationship at the beginning of a relationship or when the disclosure of confidential information is necessary to qualify an opportunity or promote a business purpose. .

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