Every business deserves to protect its sensitive information from getting into the wrong hands. This information may include financial forecasts, sales and profits earnings, marketing strategies, intellectual property and more. One way that many companies aim to safeguard these things is through the use of legal contracts known as nondisclosure agreements or confidentiality agreements.
Common uses for NDAs
There may be many different people or companies that a business wishes to have sign a nondisclosure agreement. As explained by Entrepreneur magazine, some vendors or companies providing services to a business may require access to confidential information to facilitate their work. These vendors may include agencies or suppliers, for examples.
Companies that discuss the potential sale of their business, product or technology may find it important to have the other party or parties enter into a nondisclosure agreement to ensure that an open exchange of information may ensue. Without proper information sharing, one or both parties may be unable to make effective decisions about how to proceed.
Employees and NDAs
Harvard Business Review indicates that by 2018, as many as one in three workers were bound by the terms of a confidentiality agreement. There has been an identified downside to this, however. Some NDAs all but prevent a person from accepting another job in their field. Other contracts prevent a person from speaking out about illegal or unethical behavior. Businesses are encouraged to carefully review the scope of their agreements to avoid falling into these situations. It may not be necessary for all employees to sign NDAs. Some companies may also want to provide exception clauses for select information.