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  4.  – When Should Employers Require Nondisclosure Agreements?

When Should Employers Require Nondisclosure Agreements?

On Behalf of | Jul 13, 2023 | Employment Law For Employers |

Employers could use a nondisclosure agreement (NDA) to protect sensitive information, especially vital details for day-to-day operations. However, it is crucial to know when it is appropriate. Sometimes, unnecessary NDAs could put inappropriate pressure on employees, keeping them silent about specific concerns.

It is up to employers to properly gauge a situation if the involved parties need to sign an NDA. It is one of the most used agreements in employment. Still, knowing when it is appropriate could relieve employers and employees of unnecessary legalities. The circumstances that call for NDAs could include the following:

  • Hiring procedures that might consist of discussions involving sensitive company information with candidates
  • Job positions that access proprietary information and other intellectual property (IP)
  • Preliminary presentations and meetings where external parties could learn about confidential company details
  • Acquiring contractors or third-party suppliers who might perform tasks involving company assets and client information
  • Other situations that pose risks of revealing trade secrets and varying types of sensitive information

Employers should use NDAs to protect themselves from IP theft, data breaches and information leaks. Additionally, modern technology provides other measures to keep these assets confidential in compliance with data privacy laws.

Determining enforceability

Employers can only benefit from NDAs if they use them according to local laws. If an employer imposes NDAs to keep employees silent about workplace harassment or discrimination, it might not hold up legally. Other policies come into play affecting enforceability. Employers should receive legal counsel regarding NDAs to use them properly.

Keeping the organization safe

NDAs can only protect a company up to a specific degree. Sometimes, a different tool might be more relevant based on the circumstances.

Employers should seek professional help to determine what can appropriately address risks for each situation. Doing so could improve resource usage without causing misunderstandings among employees and other parties.