Companies, especially those in competitive industries, must explore various tools to protect their businesses. One common practice is entering nondisclosure agreements (NDA) with employees. This ensures that confidential company information remains private, and in case of a breach, legal remedies are available to the victim company.
So, what information can an NDA protect?
Trade secrets
What makes a business unique and distinguishable from its competitors is its company’s trade secrets. This may include company practices, production processes, product formulas and designs and specified employee training. Basically, any company information that competitors and the public would not generally know is a trade secret.
Marketing plans and advertising techniques
Businesses’ marketing and advertising strategies greatly influence their product and service success. These strategies may include pricing and billing plans, market research and distribution strategies. The unauthorized disclosure of this marketing information will put the victim company at a great disadvantage.
Client information
The law expects businesses to keep customer data private and confidential. Failure to do so can create legal issues for the company. This is why businesses need to keep their employees in check with confidentiality tools like an NDA. This is especially applicable to employees leaving to work for a competitor or about to establish a business in the same industry.
Ensure the NDA follows state rules and regulations
While NDAs aim to protect business rights, there are still limits on what companies can include in the agreement. For one, companies can only require employees to keep information private for a certain period. Companies must ensure that the agreement terms comply with Pennsylvania employment laws to avoid any issues.