MENU

Tag: confidentiality

How NDAs Actually Help Employers Protect Data

June 5, 2022

On May 2, 2022, the Supreme Court’s draft opinion to overturn the 1973  Roe v Wade decision and return the power to determine abortion laws to US states made its way to the public domain in a leak that sparked a widespread uproar. While most outcry surrounding the opinion draft related to its impact on women’s rights, the leak brought another significant issue into the limelight: non-disclosure agreements (NDA) and related policies. Before the leak, the US public had never had access to a draft decision on a pending case in the modern history of the SCOTUS. The released draft poses a question to corporate organizations across the US: how can they protect confidential information to prevent unauthorized disclosure? The protection of such intellectual property, data and trade secrets becomes even more crucial in the digital age, where companies store sensitive data in an online company database that is subject to cyber-attacks. 

This article will discuss non-disclosure agreements (NDA) and other measures employers can take to protect information at work. 

What Are Non-disclosure Agreements?

Among businesses across the globe, confidentiality is non-negotiable. Employers share trade and professional information with employees with the assurance that these details will not go beyond the office . Non-disclosure agreements are one of the ways employers guarantee that assurance. A non-disclosure agreement is a binding legal contract that seeks to maintain the confidentiality of information. As a legal contract, an NDA ensures that one or both parties named in the agreement do not share specific information with a third party at all or without prior express written approval. 

Companies typically use NDAs to restrict employees from divulging trade secrets or intellectual property to competitors. However, contracting parties can also use an NDA to protect general privately-held company-related information. Typically, alongside the confidential information, NDAs also contain sanctions for breaching the contract, such as financial compensation and injunctions. 

What Are the Different Types of NDAs? 

There are three types of non-disclosure agreements. Here’s a quick breakdown of each of them: 

1. Unilateral NDAs

These types of NDAs involve one party disclosing confidential information to another and requesting its secrecy. Typically, businesses use unilateral NDAs to protect trade secrets and competitive data. In the employment context, all NDAs are unilateral.

2. Bilateral NDAs 

These NDAs involve two parties revealing sensitive information and signing an NDA to ensure neither individual divulges the sensitive details to a third party. Bilateral NDAs are a common theme in mergers and acquisitions. 

3. Multilateral NDAs 

These contracting confidentiality agreements involve three or more parties, with at least one of the individuals disclosing private information to the others. 

What Does an NDA Contain?

There are some vital provisions that contracting parties must include in an NDA. Some of them are:

  • Identities of the parties involved in the contract 
  • Broad definitions of the confidential information
  • The scope of the contract
  • The timeline of the agreement
  • Exclusions to the contract 
  • Sanctions for breaching the NDA
  • Related clauses, such as a non-compete, non-solicitation of employees, and non-circumvention clauses 
  • Termination of the contract

Typically, only the contract’s provider(s) can terminate an NDA. However, the contracting parties can also terminate the NDA by mutual consent or if the contract has exceeded its timeline. Also, while outlining the scope of an NDA, businesses should narrow the contract agreement to protect genuinely confidential information, as NDAs could be unenforceable if they are too broad. Furthermore, there are federal and state employment laws that determine the clauses that employers cannot include in an NDA. Corporate institutions should hire attorneys to help draft NDAs to ensure they meet state and federal regulations. 

Other Measures That Can Help Businesses Protect Workplace Confidentiality

Aside from NDAs, there are several other ways employees can ensure the protection of proprietary secrets. Here are two of the most common: 

  • Confidentiality Training and Policies 

Confidentiality training should become a part of the integration processes for new employees across businesses. HR departments should train newly-recruited employees on handling and disposing of sensitive information, company policies on sharing confidential data, and the consequences of violating these regulations. 

With social media becoming a crucial part of communication for us today, the use of the internet and other communication media in sharing private corporate information should also be a part of the details covered in the confidentiality training. Furthermore, the employee handbook should contain broad definitions of company privacy policies. 

  • Create Contingency Plans in the Event of Privacy Policy Violations 

First, your company should have a contingency plan for when an employee violates company confidentiality policies, or sensitive corporate information makes it to the public through any other means. The plan should be broad enough to cover all possible scenarios. Have strategies for removing the leaked information from the public domain, locating and disposing of other copies, and executing any legal action stated in your company policy against the guilty staff. 

Second, aside from privacy violation contingency strategies, your company may also need an exit plan for employees. This plan involves the processes employees have to go through to submit any company data or property in their possession whenever they want to leave the company. Your exit strategy should also include steps to disable and restrict access to all employee emails, company social media accounts, and online databases. 

Need NDA for Your Company? Reach Out to Our Employment Law Attorneys Today! 

Finally, confidentiality violations, such as the Supreme Court draft decision leak, can ruin corporate organizations. If your company doesn’t have an NDA in its privacy policy and you’re considering drafting one or updating the terms in the current confidentiality agreement, you’ll need an attorney to help you through the process. NDAs are sensitive contracts that can become unenforceable if you don’t draft them properly. State laws can also affect confidentiality agreements. If the scope of your NDA goes beyond state regulations, it might affect its enforceability. 

At the Law Office of Sheri Oluyemi, we can bring our expertise in US employment Law to tailor your NDA to meet your company’s privacy needs while staying within your state’s regulations. Our employment attorneys can also help you handle the legal sides of company privacy violations. 

Request a free teleconference consultation today, and let’s begin the process of protecting your company’s confidential data. 

8 Benefits Employer and Employee Exchange for Severance

September 24, 2018

Severance pay is a matter of agreement between an employer and an employee. It is an agreement that the employer will provide a payment and/or benefits to an employee at the termination of employment. This agreement is usually called a severance agreement or a separation agreement. In the absence of a legislative mandate, employers are incentivized to make offers of severance packages generally in exchange for valuable promises from the employee which would otherwise not be enforceable for lack of consideration. These promises usually include the following top 8:

  1. Agreement not to litigate or sue the employer

  2. Release from certain employment contract terms

  3. Release from future potential legal claims or disputes

  4. Indemnity for tax and other liabilities

  5. Confidentiality of the agreement

  6. Non-competition with the employer’s business interests

  7. Non-solicitation of the employer’s customers, clients and employees

  8. Non-disclosure of company trade secrets and other valuable confidential company information

In the event that one is fortunate to receive severance pay, a company may require the employee to sign documents such as a release and waiver of claims, hold harmless or indemnity agreement, etc., before releasing severance pay.  It is important to note however that not all legal claims can be waived. For instance, any agreement which prevents an employee from participating in an Equal Employment Opportunity Commission (EEOC)  proceeding or a Security Exchange Commission (SEC) inquiry is void ab initio for illegality.

Although severance pay is usually based on length of employment, some companies are willing to negotiate the severance package with otherwise ineligible employees to include some otherwise unavailable benefits. Some of the benefits an employee would desire include these top 8:

 

  1. Cash

  2. Favorable payment terms and conditions, e.g a lump sum or annuity

  3. Health, medical, dental and vision benefits – note that pursuant to COBRA, which is a federal law that provides the employee the right to continue group health benefits otherwise terminated due to separation from the employer, employers must provide the employee an opportunity to continue coverage at their own cost; as part of a severance agreement, the employer can agree to pay these costs

  4. Retaining company equipment (such as a cellphone or computer)

  5. Forebearance from challenging an application for unemployment insurance benefits

  6. Provision of outplacement, resume and social media services

  7. Letter of recommendation and other reputation protection terms and conditions

  8. Pension rights (such as profit sharing and 401(k) plans), among several other benefits that would be case-specific

Neither of the above lists are exhaustive. In fact, what each party gives and takes is highly case-specific depending entirely on each party’s priorities and capacities. An employment attorney can assist in ensuring you, as an employer receive the greatest protection for your company through a severance agreement or that you, as an employee, maximizes the benefits payable to you for the dedicated service you’ve provided to an employer.