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  • Ronald J. Axelrod, Rochester, NY, Business Lawyer

Are non-disclosure agreements still enforceable?


Signing a non-disclosure agreement with two businessmen.

Rochester, NY, Small Business Attorney Talks about Non-Disclosure Agreements:


Are non-disclosure agreements still enforceable? A non-disclosure agreement (commonly called an NDA) is a legal agreement that establishes a confidential relationship used to keep business or personal information confidential. NDAs are also known as confidentiality agreements (CAs), confidential disclosure agreements (CDAs), and proprietary information agreements (PIAs). While NDAs have many uses and names, they all have one very important thing in common: Whoever signs an NDA cannot discuss any of the information contained in the agreement with anyone who is not authorized to receive it.


When might businesses use an NDA?

A non-disclosure agreement (commonly called an NDA) is a legal agreement that establishes a confidential relationship used to keep business or personal information confidential. NDAs are also known as confidentiality agreements (CAs), confidential disclosure agreements (CDAs), and proprietary information agreements (PIAs). While NDAs have many uses and names, they all have one very important thing in common: Whoever signs an NDA cannot discuss any of the information contained in the agreement with anyone who is not authorized to receive it.



Employee signing a non-disclosure statement at a desk with an employer.

Types of NDAs


  1. Mutual Non-Disclosure Agreements When businesses enter into negotiations with other businesses, such as partnering together, an NDA allows both parties to share sensitive information without fear that it will end up in the wrong hands–such as competitors or outsiders.

  2. Non-Mutual Non-Disclosure Agreements – Some businesses require a new employee to sign an NDA when he/she will have access to confidential or sensitive information about the company. A non-mutual NDA is named as such because the employee is the only party signing the agreement.

  3. When Hiring New Employees – This type of NDA is normally negotiated with a covenant-not-to-compete (CNC). There has been a lot of government (FTC) concerns and executive orders regarding the enforceability of covenants not to compete. Many believe that non-compete clauses have no place in labor markets. These clauses prevent workers from leaving for greener employment pastures and/or starting their own businesses. The trend for getting around these arguments, or to ensure their enforceability, is to couple the covenant-not-to-complete with very strong confidentiality agreements prohibiting the use of the companies’ confidential agreements, including customer lists and formulas. Also included are non-solicitation agreements prohibiting individuals who have left the company from attempting to hire former employees to leave with him/her.


Conclusion

Whether you are an individual or a business and feel that a non-disclosure agreement would be beneficial or if you have been asked to sign one, the law offices of Ronald J. Axelrod & Associates, small business attorneys in Rochester, NY, can assist you. Call our office at (585) 203-1020 or email us through our website’s contact form.

 

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