What happens if you break an NDA?
Non-disclosure agreements are common in the workplace, but are they as ironclad as they seem? Here’s what happens if you break an NDA.
A non-disclosure agreement (NDA) is essentially a contractually obligated promise to keep a secret. Since it is a legal contract, there are consequences for breaking an employment NDA agreement.
Employment NDA agreement violations.
Since NDAs are civil contracts, breaking one isn’t technically a crime. However, it could come with severe financial penalties. Violating an NDA leaves you open to lawsuits from your employer, and you could be required to pay financial damages and possibly associated legal costs.
It’s illegal to reveal trade secrets or sensitive company information to a competitor. It can carry legal consequences, including fines and even jail time — even if you didn’t sign an NDA.
What should you include in an NDA?
If you’re a business owner or manage an HR department, NDAs can help protect your ideas, trade secrets, and business techniques. Of course, it only works if you include the right information in your employer NDA agreements:
- Specified time frame — How long does the NDA last?
- Description of confidential information — Include detailed descriptions of what’s considered confidential. You should also define what isn’t confidential to clear up any misunderstandings.
- Personal information — Be clear about who is involved in the NDA.
- Explanation of purpose — Explain why the information is confidential.
- Consequences — What happens if an employee breaks the NDA? Describe the consequences and who’s responsible for what (like legal fees).
It’s always best to consult a lawyer when drafting an NDA. They’re important legal documents, and you want to make sure you don’t leave out any vital information.
All non-disclosure agreements need to be signed by both the employee and the employer to make them valid. Electronic signature software like Adobe Sign can speed up the process by allowing both parties to legally sign the NDA remotely with the click of a button.
Discover more about how Sign can help facilitate HR processes and protect your business information.