Company secrets, business models, product formulas and other confidential pieces of information are exchanged every day among corporate colleagues. It is a necessary part of conducting business, but if a company’s secrets got out, it could mean financial devastation. A non-disclosure agreement helps ensure that sensitive information is not disclosed to any unauthorized individual.
What is a Non-Disclosure Agreement?
A non-disclosure agreement, also known as an NDA, is a legal document in which a person agrees to not disclose confidential or protected information they receive in the course of doing business. The NDA will specify what information is protected and the length of time that the employee is required to withhold releasing the information.
Why is a Non-Disclosure Agreement Important?
New product development at established companies, innovating new ideas at startup companies, or obtaining new investors, clients or suppliers all require the ability to openly exchange privileged information among the individuals involved. Having an enforceable NDA allows for the necessary communication between the appropriate parties without sacrificing proprietary or sensitive information.
What Happens if you Violate an NDA?
Often times, it depends on the company. If the violation has not resulted in a significant loss to the company, they may decide to not take action against the offender. However, it is completely within the company’s rights to prosecute to the full extent of the law according to the terms set forth in the NDA, including payment of financial damages and related costs and even criminal charges.
The attorneys at Churchill, Quinn, Richtman & Hamilton, Ltd have successfully represented companies whose confidentiality rights have been compromised, as well as individuals who have been accused of violating the terms of an NDA. The laws surrounding this issue are complex and should be handled by an attorney experienced in this type of defense. Contact us at 847-223-1500 to learn more about our prior successes in non-disclosure matters for both employers and employees.
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