Why are NDAs Important?

Non-disclosure agreements enable businesses to pursue their goals by sharing information freely among decision-makers within the organization while ensuring that the employees who are party to this confidential information do not share it with others.

Knowledge is the most valuable resource a business can own. Everyone knows that the magic ingredient in Chick-fil-A’s chicken sandwiches is Southern charm, but no one except a few high-ranking executives at Chick-fil-A knows the exact formula for it. If we did, we would all be making copycat Chick-fil-A in our kitchens seven days a week instead of just on Sundays. Often the success of a business rests on what insiders know and outsiders do not know. In some cases, it is legal for businesses to prohibit current and former employees from revealing confidential information that they obtained in the course of their work. To establish this restriction, the employer and the employee must sign a non-disclosure agreement (NDA). To find out whether the NDA your employer wants you to sign is legally enforceable, contact the Norcross, Georgia corporate law attorneys at Zimmerman & Associates.

Keeping Confidential Information Secret Without Restricting Employees’ Career Prospects

The purpose of NDAs is to protect the confidentiality of information that is not protected by other intellectual property rights such as trademarks or patents. For example, NDAs can prohibit employees from sharing the contact information of clients, and they can prevent employees from talking to people outside the organization about a business project that is in its early stages. Some NDAs remain in force only as long as the employee continues working for the organization, but some continue for a limited period after the business relationship ends.

NDAs do not have to take place between an employer and an employee. Sometimes businesses that wish to collaborate with each other will sign an NDA to prevent each party from revealing the other’s secrets in a way that would be detrimental to fair competition.

NDAs are not the same thing as non-compete agreements, although some employment agreements include both non-disclosure and non-compete provisions. A non-compete agreement restricts an employee’s right to set up a new business that directly competes with the employer after the employment relationship ends. Until recently, employers frequently required employees to sign non-compete agreements in order to prevent them from seeking out better work opportunities. Non-compete agreements are only appropriate for employees in high-ranking positions who see the company’s business decisions up close, but in early 2021, one-fifth of American workers who had employment contracts but did not hold bachelor’s degrees were subject to non-compete agreements. In 2021, a federal executive urged the Federal Trade Commission to impose penalties on companies that require employees to sign overly restrictive non-compete agreements.

Contact Zimmerman & Associates About Non-Disclosure Agreements in Georgia

An Atlanta corporate law attorney can help you understand the implications of an NDA that an employer wants you to sign and can help you negotiate to amend it if necessary. Contact Zimmerman & Associates in Norcross, Georgia to set up a consultation.