What is a Non-Disclosure Agreement (NDA)?

A Non-Disclosure Agreement (NDA) (often referred to as Confidentiality Agreement) is a written document that legally binds two parties, in which the information of each party should be kept confidential.

Important Aspects of Non- Disclosure Agreement (NDA):

In today's world, it is important for an individual or employer to keep their information confidential. For this particular reason, the employer finds it useful to sign a non-disclosure agreement (NDA) at the time of hiring an employee. This allows them to bind an employee into not sharing any confidential information that can harm their reputation in the market.

While issuing a Non-Disclosure Agreement (NDA) to an employee, employers should make sure that the company's interests are safeguarded in accordance with laws and the rights of employees should also be protected.

A Non-Disclosure Agreement (NDA) must highlight two time periods. A period of time to keep the information confidential and the time period in which disclosed information is agreed upon. In case there is no specific time period mentioned in a contract, a possibility is there for any litigation and judicial review at a later stage.

There are two important stages of Non-Disclosure Agreement (NDA) through which information is kept confidential of an employer, during hiring of an employee and once he quit from an organization:

Stage 1: Pre-Employment Agreement:

It has been a common practice by employers to issue a detailed NDA to the employee at the time of accepting a job offer or at least before resignation. This allows employees to be aware of how they should deal with confidential information of a company before and after employment. The main purpose of mentioning the non-disclosure agreement clause along with the appointment letter is that an employee must abide by the terms and conditions of an employer as stated therein.

Stage 2: Post-Employment Agreement:

There is a need to develop effective techniques to reserve the rights of a business at the time of termination of a contract from either party. The post-employment techniques are meant to prevent an employer from the disgruntled employees once they leave an organization and can misuse ex-employer records.

The first step to being considered once an employee submits resignation to an organization is that a detailed agreement is to be signed to prevent the misuse of the company's internal information, restricted information, and client's confidential data. We often see that in case such an agreement is not signed then a disgruntled employee makes an effort to spoil the image of an organization in the market.

A non-solicitation agreement should also be developed and implemented by the employer, which clearly outlines that, an employee either directly or indirectly, personally or electronically should not engage with any of the ex-employer clients, distributors, and vendors within a specific geographical region.

There will be proper enforcement of an NDA with the help of both pre-and post-employment confidentiality agreements, which results in the protection of employer information. A proper understanding of the legalities results in the inadequate implementation of non-disclosure / confidential agreements.

Employers should also make appropriate strategies in order to avoid a breach of any such agreements from the employee. From time to time, employees should be given proper training to handle, private, confidential, and sensitive information. A certain mindset should be developed in an organization which clearly indicates that misusing company information is considered a practical discouragement.