Your employment of the best and brightest results in trade secrets that you hope remain just that: secrets! That’s why non-disclosures exist and why you should be using them.
Time and time again, employees have exchanged trade secrets for a bigger paycheck with the competition. You can’t blame them, without a non-disclosure agreement, they’re just being smart. You can, however, protect yourself from having it happen again. With a non-disclosure in place, you can protect your business.
Here are five components of a non-disclosure agreement, according to Forbes.
- Identification of the parties. Name the players and their roles.
- Definition of what is confidential. How broad or narrow your definition is up to you, however, it is generally advisable to go as broad as possible.
- The scope of the confidentiality obligation by the receiving party. Typically means that the receiving party cannot use the information and they must take reasonable measures to ensure its confidentiality.
- The exclusions from confidential treatment. A listing of any circumstances in which an employee would not be expected to maintain confidentiality, such as, if the employee knew this information previously.
- The term of the agreement. Although you may want to put a lifelong limit on your trade secrets, it’s just not in your best interest to do so. Set reasonable terms based on industry standards, or consult an expert.
Types of non-disclosures
- Mutual. In a mutual non-disclosure, both the one disclosing and the recipient of the information are bound by the agreement to protect each other’s secrets. This occurs when involved in an information exchange with either another person or company.
- Non-mutual. Here, just one side is providing the information.
Go ahead and hire the best and brightest. With a non-disclosure agreement signed and on file, you can protect your companies trade secrets and continue your path of innovation.