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California Non-Disclosure Agreements Done Right

Jan 7, 2019 | Business

California Non-Disclosure Agreements

In the modern, competitive workplace, maintaining an edge over your competitors’ ideas and innovations has never been more important to the success and longevity of your enterprise. For this reason alone, non-disclosure agreements have become ubiquitous and commonplace across many industries. The fear of secrets, designs, and upcoming ideas or trends leaking out is so prevalent that many companies struggle to contain their own in-house secrets and methods from their competitors without subjecting their own workers to intense scrutiny. However, this is where some of the advantages that come with non-disclosure agreements shine through.

Non-Disclosure Agreements For Business New Employee Hires

Think of it this way: when a business hires a new employee, the very last thing they want out of their new member is for another company to swoop in with a more lucrative offer to steal the employee…especially if the new employee has had some time to learn about the company’s trade secrets and confidential information. Having a key employee or asset leave your company and work for a competitor can be disastrous because of the secret information the worker may have had access to while they worked for you. If they manage to share those secrets with a competitor, then you may very well risk losing your competitive edge in your industry.

How Non-Disclosure Agreements Can Help Businesses

On that note, non-disclosure agreements can help business and prevent this whole situation from ever arising by simply preventing your workers from disclosing or even talking about company secrets and confidential information. However, generic non-disclosure agreements are of little use to most businesses, because each company has its own niche and thus, its own secret information. As such, the best non-disclosure agreements are the ones which are specifically tailored to a company’s needs by an attentive business lawyer. That way, you can be sure that the non-disclosure agreement touches upon all of the relevant points for your company.

Contents to Include in Non-Disclosure Agreement

As far as non-disclosure agreements go, it’s always very important to be particular with what you outline in the contract. Tailoring the agreement to your needs is key to an enforceable and successful agreement that can hold up well in court. So, before making your employee sign your non-disclosure agreement, you’ll want to take a closer look at the contents of the agreement first. Make sure that your agreement mentions:

  • A specific way in which the non-disclosure agreement is effective
    • For example, if your business has secrets which contain information that will always be confidential (such as secret recipes for food, algorithms for software, for a secret formula for a blueprint) then your agreement had better reflect that. In such cases, the agreement has to specify that the employee cannot disclose the information at all; the indefinite nature of the agreement is necessitated by the confidential nature of the information at stake. It should also clearly outline the policies and protocols or procedures that the employee must follow in order to prevent unjust disclosure.
  • A thorough definition of what constitutes “confidential information”
    • Despite the fact that it may seem entirely obvious to you, an agreement that does not specify what is “confidential information” or what counts as trade secrets, will have little to no benefit to you since it will be very hard to enforce such a vague and unclear agreement in court. To avoid this scenario, the agreement can either specifically call out particular bits of information that employees should not share, or it can alternatively describe “confidential information” in enough detail so that any new employee will receive adequate notice as to what kinds of information are not to be shared.
  • An outline of possible consequences or remedies
    • Even if your new employee signs off on a non-disclosure agreement, there is always a chance that they will still violate the terms of your agreement. In fact, there is even a legal term for this: inevitable disclosure. For these situations, your agreement should specify what type of compensation you will be entitled to in the event that a breach occurs. The types of remedies for a breach include monetary compensation for damages to your business as a result of the leak of confidential information, as well as attorney fees incurred throughout the process of enforcing the non-disclosure agreement.

We Can Help

At KAASS LAW, our business law lawyers believe in our clients’ abilities to innovate within their industries. We stand by our clients by helping them draft up specific, tailored non-disclosure agreements to maximize the benefits that it can offer. Ensuring our clients’ commercial success is key for us and we demonstrate this by being with you every step of the way. Even in the event that information gets illegally leaked, we are here to make sure our clients get their due compensation in court. We invite you to give us a toll free call at 310-933-5171 to speak to our California business attorneys today to see how we can help protect the most valuable assets of your business.

KAASS LAW, 815 E Colorado St #220, Glendale, CA 91205, 310-933-5171