If there is one thing that you shouldn’t miss in any kind of relationship is trust. For employers, it can be difficult to determine the honesty, trust, and loyalty of your newly employed workers. In some cases, employers may need to take extra precautionary measures in order to protect their business’ confidential information from being shared out without their consent. As such, if you don’t trust your newly hired workers with the confidential information of your business/workplace, then having an Employee Non-Disclosure Agreement should be your policy. Note that the Employee Non-Disclosure Agreement isn’t only or the new employees but the old ones as well.
What is an Employee Non-Disclosure Agreement?
Put in simple terms; an Employee Non-Disclosure Agreement is a legal contract between an employer and an employee in which both parties’ promises not to disclose trade secrets as well as other confidential information without authorization. In order to make it legally binding, both the employer and the employee must append their signatures in the document. While some employers ask their employees to assign the non-disclosure agreement with advanced knowledge, some make it a mandatory and standard or all employees to sign. Regardless of nature, the NDA is presented, it is always important for the employer to specify which type of information is confidential and which ones are not. Through this, the employees will understand better the type of information that would be harmful to share.
What Information can NDA Protect?
Typically, an employee NDA helps protect private and confidential information as well as other trade secrets. Also, it helps protect a business’s possessions that include the following:
- Process: A company/business may have its own unique process of doing things either in the processing or manufacturing sectors. Examples of these processes may include how to manufacture biscuits. In such cases, they wouldn’t want to share their process to its rivalries; hence will try to keep such information secret and confidential.
- Business strategies and methods: The other thing a company would want to protect under employee NDA is business strategies such as advertising methods, marketing schemes, new product announcements, to mention a few.
- Project designs, blueprints, and specifications: Another significant confidential information a company would want to keep secret includes the designs and specifications of products, machines, and structures. For instance, when a new product is still at its design stage, its development and specification should be kept as confidential as possible. This will help prevent copyrights by other competitors within the same niche.
- Formulas: The other obvious trade secret is formulas. Formulas help solve a problem within the market – and If a company has a given formula of doing things, it will be reluctant to share it with the outside world. A better example is the formula Coca Cola Company uses to make its distinctive soft drinks.
How to Write an Employee Non-Disclosure Agreement
Writing an Employee Non-Disclosure Agreement isn’t an easy process. It is not only time consuming but can also be tiresome, especially if you haven’t done it before. If time and efficiency is a factor to consider, you can download our free Employee Non-Disclosure Agreement templates. The templates are nicely structured to provide you with easy and quick filling. However, if you feel you want to write one from scratch on your own, the following steps will help you through:
First and foremost, you need to write down the names and addresses of both the employer and the employee. Alter this, and you need to proceed to the company’s trade secrets.
Company trade secrets
Here, you will clearly define the company’s/business trade secrets that need to be kept confidential. Make sure you make your employees understand what materials, processes, or information should be protected.
Non-disclosure trade secrets
In this section, there should be clear guidelines that deter the employee from disclosing confidential information without authorization. Plus, it highlights the employee’s obligation to protect the secrecy of the company’s trade secrets.
Confidential information of others
In this clause, you will remind the newly hired workers not to disclose any confidential information learned from the older employees.
Return of material
One thing you should keep in mind is that not all employees will always stick in your company forever. At some point in time, they can leave and go elsewhere. But even after leaving, they should be obliged to return all the materials containing trade secrets and other confidential information.
For the agreement to be legal, there should be signatures from both parties (employer and employee).
Frequently Asked Questions
According to Hostopia Inc. ruling, this will depend on the nature of the job. If the employee is accessed to sensitive and confidential information, then he/she will be forced to sign the document before retaining their job. However, if the job does involve confidential information, then they will not be fired for that reason.
A Non-Disclosure Agreement is a contractual agreement. Therefore, both parties should reach an agreement on whether or not to sign to the agreement.
Typically, an Employee Non-Disclosure Agreement can last to a period of between 1 to five years. The period, however, is majorly determined by the nature of the agreement and the market conditions. Also, most business owners or employers enforce a Non-Disclosure Agreement term that will best help protect their confidentiality
When an employee signs a Non-Disclosure Agreement, it becomes legally binding. Therefore, if violated, the employer will face the threat of being sued and could be liable for paying any damages caused in the process.
Employees can be made to sign the Non-Disclosure Agreement A condition of employment, as part of a settlement agreement or as seer ace package.