Employees may find themselves across the desk from someone asking them to sign a Non-Disclosure Agreement (NDA), sometimes referred to as a confidentiality agreement. NDAs are common in business. They are designed to protect important and confidential information related to the successful running of a business.
However, just because NDAs generally are used in business, this is not to say that an employee is bound by an NDA just because they sign it.
What are the Limits of an NDA?
An NDA that declares an employee cannot say anything about anything that happens at the office is likely unenforceable. Rather, NDAs should cover confidential information and proprietary information that is otherwise unavailable. This can include:
- The customer database
- Proprietary technologies
- Marketing strategies
- The recipe for the “secret sauce” (both literally and figuratively)
- Anything else that is not generally available to the public that is critical to a business's success.
Topics Not Generally Subject to NDAs
An employer can decide generally what they want included in an NDA. However, they do not have complete control over these topics. Under California law, an NDA cannot include prohibitions against disclosing the following:
- Information the employee already knows
- Information the employee acquires on their own
- Publicly available information
- Information independently obtained
- Information received by a third-party source
What Are the Conditions of Signing the NDA?
If an employee is required to sign the NDA as a condition of employment, an employer does not have to provide any additional compensation for their signature. Instead, it is enough that the worker gets the job in exchange for the signature. On the other hand, if the worker is already employed and the employer asks them to sign an NDA, the employee may be able to claim some additional compensation in exchange for their signature. This might include a promotion, a raise, a one time bonus, or additional vacation days.
Requiring Workers to Sign an NDA in California
If you are requiring workers to sign an NDA, consider consulting with an experienced business law attorney. NDAs should be reviewed to protect your business from unfair competition or IP theft. Mohsen Parsa, Inc. offers free consultations to discuss your business law needs in greater Los Angeles and Orange County. Call him today at (949) 394-6930 to discuss your situation today.