Non-disclosure agreements, when they work, help form a shield around your New York company’s sensitive information and prevent your workers from giving the information out to competitors and also prevent unfair competition from the use of your own company’s documents. However, if you do not spell out certain provisions before your workers sign your NDA, you might find your agreement is harder to enforce.
Fortunately, you can make your NDA more effective by clarifying some issues in the document itself. These issues can vary. Still, while not every NDA will be the same, generally many NDAs should address some common topics.
According to Forbes, it is a good idea to spell out who pays for the legal fees in the event of litigation over the agreement. Since court battles can be expensive, putting in a provision that the losing party must pay the court costs can allow your company to recoup the cost of enforcing the NDA. However, a loser pay provision could backfire if for any reason you were to lose in court. Still, having this provision can also act as a disincentive for any of your workers to break the NDA.
Some companies have workers who reside in other states. If this is the case for your company, specifying which state will be the venue to litigate your NDA is important. Since laws vary by state, you might find yourself at a disadvantage litigating in another state. You may also find it troublesome to travel to another state to handle your litigation.
You can also offer up alternatives to court trials in your NDA. Consider other means to resolve disputes, such as taking the matter before an arbitrator or a mediator. There are good reasons to keep this door open, including the fact that these alternatives can go faster than a court trial and cost less money.
Returning Sensitive Documents
If your worker handles sensitive documents, you should specify that the worker should return such paperwork, at least by the time your worker leaves your employ. Even though your NDA may specify non-disclosure of information, you should still account for your company’s documents. Your worker might keep to the agreement but there is no guarantee those documents will not wind up in someone else’s hands by mistake.
Chron.com points out that confidentiality agreements are frequently coupled with non-compete agreements. However, you want to be careful with a non-compete agreement, since there are many states that will not enforce them if they go too far. Still, a non-compete clause that specifies that a worker cannot use your sensitive information to compete against you should be legally sound.