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Non-Disclosure Agreement (NDA) Law

A non-disclosure agreement is an agreement of confidentiality between two or more parties outlining the information, materials or knowledge that the parties agree to share and also agree not to disclose to it to third parties or make public. Such agreements may also be referred to as Proprietary Information Agreement or Confidentiality Disclosure Agreement. Below, Legal Experts answer some of the common questions on non-disclosure agreements.

While our business is headquartered in Idaho, our laboratory is in Washington. A client wants to tour our lab and wishes to copy our product rather than buy it. Should we get them to sign a non-disclosure agreement? Should we make separate ones for each state and have it notarized?

You may require your client to sign a non-disclosure agreement before the tour of your laboratory, which states that the client may not use the information from your company for any commercial purposes or gain. If you so require, the agreement may also include terms of a non-compete agreement, where the client is restricted by a non-competition clause.

You will not need to have the agreement notarized; a simple signature of the client on the agreement would suffice. While you will not need a separate agreement for each state, you may specify the state law and jurisdiction of the state (Idaho or WO) that you wish to apply in the event of a dispute.

Can a there be a verbal non-disclosure and confidentiality agreement, where a conversation took place over the phone and no documents were signed?

In legal terms, a verbal contract is legal. However, they are practically impossible to enforce or prove in court unless the party who has been indicted for breach of contract admits guilt. For this reason, written contracts are best to protect the rights of the parties concerned.

The non-disclosure agreement I signed with my employer continues for two years after job termination. However, since prospective employers are fearful of legal action, I am finding it difficult to get employment. What’s my recourse?

Typically, the non-disclosure agreement deals only with proprietary or confidential information related to systems, processes or any patented methods of production. You are prohibited from disclosing any such information learned at your previous employment. However, this does not restrict you from working with a competitor. Also, in case of a violation of the non-disclosure agreement, only you — and not your employer — will be held liable for disclosing trade secrets.

Can my employer monitor my home computer as part of a non-disclosure agreement?

Typically, your home computer is your personal property and cannot be monitored by your employer for any purposes. Unless you specifically agreed to it in your non-disclosure agreement, you may invoke your constitutional right to privacy. Of course, this right would be subject to any conduct on your part that would justify a search warrant which allows the employer to access the contents of your computer.

Since I have signed a non-disclosure agreement with my company, can I include in my Resume quantitative statements of the dollar amounts of accounts I have worked on for the sake of prospective employers?

You may not disclosure specific details of the accounts you worked on — the name of the company, their revenue, customer lists, etc. this may lead to your current employer saying that you breached the non-disclosure agreement.

However, you may state your accomplishments to prospective employer without the specifics. You may write that you “crossed the target of account sales worth a million dollars” or “sold XYZ products worth millions of dollars to Fortune 500 companies”, etc. If you have reason to believe that any information you put in your Resume could be perceived as confidential, you may choose to not make it public.

Non-disclosure agreements may be unilateral — where only one party discloses information that the other agrees to not make public — or it may be mutual with both parties sharing confidential information. While most states concur on laws related to non-disclosure agreements, it is best to seek legal Expert opinions when drafting such an agreement.
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