Non-Disclosure Agreements

Is an employer or potential client asking you to sign a non-disclosure agreement and you're not sure if it is legally sound? Have you left your job to work in the same industry only to find out you're being sued or threatened with suit by your former employer because you had signed a non-disclosure agreement in the past?

The Rubin Law Corporation understands non-disclosure agreement litigation and we are dedicated to protecting your rights as an employee. It is not legal for an employer to restrict you from taking another position as long as you are not unlawfully using sensitive information from that company.

Got questions about non-disclosure agreements and how they can effect you? See below for answers to common questions.

What is a non-disclosure agreement?

A non-disclosure agreement (NDA) is a signed agreement between you and an employer that is designed to help protect an employer's trade secrets. The trouble for you the employee, however, is that non-disclosure agreements can be written so broadly that they encompass everything read, learned, taught, or seen at a business.

For example, if you work for a pharmaceutical company that makes headache medicine and then left that company to work for one that makes  heart medicine you may have previously signed a NDA that could cause a legal headache for you because both of these companies are in the pharmaceutical field. Situations like these may be legally sound if the employer is truly protecting a trade secret, but in most cases the employer writes their NDA's in an effort to discourage you from pursuing a career in a related field. In effect, it is an unlawful (and in California) unenforceable non-compete agreement masquerading as a NDA.

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An employer is asking me to sign a NDA before accepting a job, what should I do?

The best answer to this question is simple, say no. However, that is usually not the most viable option. The best advice is to read your NDA thoroughly and even have an attorney look over it before you sign. An employer does have a right to protect his company's trade secrets, however, the scope of that protection is limited. They can have you sign a NDA if you have access to valuable company data, such as a certain product formulas. On the other hand, they cannot have you sign a NDA if they are trying to protect information that would be considered common industry knowledge. If, for example, 5 companies compete in an industry where each of the competing companies provides one service or another to a stable of 50 client companies, then even client lists in that circumstance could hardly be deemed confidential (i.e., everyone knows who the customers are, it is the terms and conditions of service that might be of interest).

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Incentives and non-disclosure agreements

Many employers will offer current and former employees incentives in exchange for signing a NDA. This practice is both legal and common in the business world and is perfectly acceptable by the courts. For example, an employee that is leaving may be asked to sign a NDA in exchange for extra severance pay. Also, an employer may request a NDA when hiring a new employee. In this case, the act of receiving the job is considered incentive enough. However, if your current employer asks you to sign a NDA without compensation, then this  might well be unenforceable against you.

Know your rights and contact us today!

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Rubin Law Corporation - (310) 385-0777 Specializing in Contract Law Services Contact us today for a consultation!