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Possible challenges to nondisclosure agreements

The success of a business is often based on its ability to distinguish itself from others in their industry.

As business owners create unique business plans, personalized and effective approaches to service their customers, know their local supply chains and customer bases, and cultivate their business in order to  set it apart from others, they want to protect the business and trade secrets that have developed, and which led to their success, at all costs.

However, protecting these business and trade secrets can be difficult, especially when employees who are privy to that information leave their jobs.

Often, these employees wish to move to competitors of their employers, and take with them the business and trade secrets that they have learned while they are your employee.

Thankfully, business owners can attempt to stop the spread of their business and trade secrets through the use of Nondisclosure agreements.

Nondisclosure agreements (NDAs) are contractual agreements wherein – in one form or another – an employee agrees that they may not communicate your business and/or trade secrets to a competitor, thereby protecting the tools that you developed to make your business successful.

Neverthless, NDAs are often challenged by individuals who do not want to be limited in their employment opportunities, or be prevented from using the business knowledge they gained while your employee[1].

Nondisclosure agreement challenges

Nondisclosure agreements get challenged on many grounds.

Some of the most common arguments to have nondisclosure agreements set aside include:

  • The terms of the NDA is too broad or burdensome, or that it prevents employees from finding work outside of their employers.
  • The employer has already disclosed the business and/or trade secrets at issue, and therefore the employee may also share the otherwise private business information.
  • The business has not been damaged, or will not be damaged, by disclosures covered by the existing NDA.

When these, and other, arguments are successfully made, NDAs may be set aside.

Get existing NDAs checked by an attorney

Many businesses draft and execute NDAs with their employees, but their contracts may not be enforceable or in alignment with New York law.

Business litigation and law attorneys such as Bashian P.C. can review such documents for their clients for accuracy and enforceability.

Having clear and valid NDAs in place can save businesses time and money later on if their employees attempt to share their protected business information.

If you have questions regarding NDAs and/or business or trade secrets, call Bashian P.C.

[1] This post will briefly address some common challenges to nondisclosure agreements, but readers should know that no part of this post should be read as legal advice.


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