A Non-Disclosure Agreement, or NDA, also known as a Confidentiality Agreement is a legal form that prevents the signer from divulging the information specified in the agreement. There are, generally speaking, two kinds of this kind of agreement; a Unilateral Agreement, requiring that one party not disclose the information being granted by the other party or a Bilateral Agreement, requiring that both parties keep the information secret. A Non-Disclosure Agreement cannot keep the signer from disclosing information considered common knowledge.
Using a Non-Disclosure Agreement
These agreements are most commonly used by corporations to ensure that their employees keep their trade secrets away from other companies. This can sometimes overlap with what is known as a Non-Compete Agreement, but this is not always the case. Often times a Non-Disclosure Agreement can simply prevent the signer from revealing certain information, either to competing companies or to the public at large.
An NDA can be used by imposing severe penalties on the signer if they disclose the information specified within the agreement, usually financial or legal. The agreement can either name specific information that the signer is not allowed to disclose, or specify a time frame during which the signer gets information that they cannot disclose (for example, their time of employment at the corporation requiring them to sign an NDA).
An agreement like this usually has a specific time frame for how long until the signer can disclose the information specified in the agreement. Very few NDAs will forbid the signer from disclosing the information permanently, and they tend to be NDAs forbidding the signer from divulging government secrets.
Unlike many agreements, there are situations where an NDA can be violated without the signer facing the consequences. Most notably, if the signer has reason to believe that the company or other group that required them to sign the Non-Disclosure Agreement has violated the law. In these cases, the signer is required to take this information to the police or other law enforcement agency, as taking the information to another group, such as competitor or a press agency, would constitute a violation of the NDA.
An NDA will also be invalid if the signer can prove they had knowledge of the information they disclosed prior to signing the agreement. Obviously this will be quite difficult, as it is hard to legally prove when the signer gained knowledge, but it is a legal defense in the case of the signer being signed for violating a Non-Disclosure Agreement.
Certain states, most notably California, there are certain circumstances under which the signer can violate a Non-Disclosure or a Non-Compete Agreement. The reason for this is usually because the state places a greater value on the signers ability to get new jobs than it does on the company’s ability to protect their interests. The signer should therefore be aware of the local and state laws regarding NDAs before signing one.