What is the importance of an NDA?

| Nov 6, 2019 | Business Law

No matter your industry, you have information that your competitors may find advantageous. Therefore, establishing a nondisclosure agreement (NDA) with your employees may give you grounds for recourse in the event an information leak results in suffering a financial loss.

As a business owner, you have multiple factors to consider as you hire employees to assist with operations. At first, you might only need one or two people to handle phone calls, fill orders or balance financial statements. As your business takes shape, however, there’s a good chance you will need people to fill higher-level positions.

Some employees will need a greater understanding of the inner-workings of your company. But you would be wise to protect your proprietary information before sharing it with them.

A confidentiality agreement can provide mutual benefits for your business and employees

While an NDA may have great importance for the growth and development of your company, it can also benefit your employees by making your expectations clear. In addition to your trade secrets, a confidentiality agreement might prohibit a worker from providing information to an external source about your:

  • Client list
  • Marketing strategy
  • Account balances

Taking this step to protect your business shows your employees how serious you are about sharing information. Plus, you can specify exactly what you want to remain confidential while designating how you want information handled.

An attorney can work with you to draft an NDA appropriate to your business needs and goals. And should you find yourself involved in a dispute, they can help defend your case.