{"id":40090,"date":"2021-03-31T10:22:48","date_gmt":"2021-03-31T08:22:48","guid":{"rendered":"https:\/\/zuniclaw.com\/why-you-should-conclude-an-nda-with-your-employees-and-how-to-avoid-the-most-common-mistakes\/"},"modified":"2025-05-12T10:11:12","modified_gmt":"2025-05-12T08:11:12","slug":"nda-with-employees","status":"publish","type":"post","link":"https:\/\/zuniclaw.com\/en\/nda-with-employees\/","title":{"rendered":"NDA with Employees: Best Practices for Employers"},"content":{"rendered":"\t\t
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Because your culture is how your company makes decisions when you\u2019re not there. It\u2019s the set of assumptions your employees use to resolve the problems they face every day. It\u2019s how they behave when no one is looking. If you don\u2019t methodically set your culture, then two-thirds of it will end up being accidental and the rest will be a mistake. <\/em><\/p><\/div><\/div>

Ben Horowitz <\/strong>What You Do is Who You Are: How to Create Your Business Culture<\/span><\/div><\/div><\/div><\/div><\/section><\/div>

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Within a company, the exchange of information occurs daily \u2013 from data on current products and services, new ideas, and planned projects, to information on finance, and client data. When it comes to keeping the employer\u2019s trade secrets, a well-developed employee culture is key to a successful business. Still, it is important to realize in time that in business, nothing is a given, not even loyalty, and trust cannot be given to anyone on a silver platter, not even your employees. Also, in order for trade secrets to be protected, the employer has to treat them in the right manner. This includes a number of procedures and rules within the company, among which the first (and key) step is to conclude an NDA with employees.<\/p><\/div><\/section>

Have you ever wondered why the Coca-Cola recipe is considered to be the most, well-kept secret in the world? From the creation of this non-alcoholic beverage until today, its ingredients remain a mystery to the public, which is a clear indication that the most valuable resource of the most successful world corporations is information and knowledge. Of course, what we are talking about here is commercially profitable data which can be the main resource and key to the success of the individual who uses it in the right way.<\/p>

Still, while chasing business goals, it might slip one\u2019s mind that, most often, that kind of information loses its value once it becomes available to the wider public. Coca-Cola became aware of that fact when in 2006, three employees tried to sell Coca-Cola\u2019s confidential corporate information, directly to its biggest competitor \u2013 PepsiCo. Luckily for Coca-Cola, the most valuable information was not leaked to the public. The CEO at the time, after this (almost) catastrophic incident, concluded that the biggest responsibility of a company is to adequately protect its trade secrets, which represent the essence of a successful business.<\/p>

If even after Coca-Cola\u2019s example, you are reluctant whether concluding an NDA with employees is a must, in the next part of this blog, you will find compelling arguments after which you will surely reconsider.<\/p><\/div><\/section>

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Benefits of NDA with Employees<\/h2><\/div>

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1. Prevent a Breach of Trade Secret<\/h3><\/div>

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Each information that has commercial value and whose destroying or disclosing could damage a company, represents its trade secret. What gives particular information its value is the fact that it is confidential is, thus it is completely understandable that its discloser shall wish to fully protect it, by taking adequate measures, such as drafting a Non-Disclosure Agreement (NDA<\/em>).<\/p>

When employees are the ones you protect your trade secret from, the question of adequate measures differs. Namely, the possibility of disclosing trade secrets to a competitor by an employee with whom the employment relationship has ceased represents a huge risk that no employer wants to face. However, nowadays, almost every company finds itself in a tricky situation several times, if we take into consideration the modern market, which from day to day becomes more dynamic due to rapid development of industry and technology, which is a very suitable \u201cfield\u201d for transferring \u2018forbidden\u2019 information.<\/p><\/div><\/section>

The obsolete concept of a full length of service at one employer is rare nowadays, and it represents a relic of the past. Changing employers is more and more common, which is a consequence of great employee mobility, numerous possibilities of employment in various fields, and a noticeable tendency of ambitious individuals to start their own businesses, which keeps growing every year. Research covering this topic<\/a> has shown that newer generations (students who have graduated in the past 15 years) in the first 5 years of their professional career change at least 4 different employers, which is not surprising, especially when it comes to the IT industry.<\/p><\/div><\/div><\/section>

Based on this fact, it is extremely important that as an employer, you are aware of the necessity to take serious measures, in order to secure your valuable trade secrets in time<\/strong>. One of the most effective methods of protection, besides others, is a confidentiality agreement. If you have already drafted an all-encompassing and adequate NDA, you can be sure that you are on the right path \u2013 your employees shall, without doubt, think twice before disclosing information that came into their possession while working for your company.<\/p>

Even if your employee does not think about switching their job, the possibility of \u2018leaking\u2019 confidential information is not excluded. It can just as easily happen that, whilst talking to a friend, an employee, unintentionally tells a story about an interesting event from the office, or an anecdote they heard from their colleague. It is clear that the said scenario could end with the employee disclosing your company\u2019s trade secrets to third parties. However, by concluding a trade secret agreement, the awareness about the severity of keeping confidential information raises, which prevents your employees from \u2018accidentally\u2019 causing damage to your business.<\/p><\/div><\/section>

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2. What Falls Under Confidential Information?<\/h3><\/div>

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One of the crucial elements of confidentiality agreements is to define confidential information<\/strong>. By precisely stating to what information the obligation of keeping confidentiality refers to, you are clearly stating which aspects of the business have to remain within the company, and which, if disclosed to third parties, could lead to sanctioning. However, sometimes, by focusing on the commercial goals and success of their business, employers fail to see the full picture, from the aspect of the employee, and think: is it truly clear to everyone what is considered confidential?<\/strong><\/p>

In case your answer to the previous question without thinking is YES, then we dare conclude that you have informed yourself in time and concluded appropriate confidentiality agreements with your employees, which precisely define what the obligation of confidentiality refers to.<\/p>

In case you were flabbergasted by this question, then we advise you to take a step back and think through what information shall be deemed confidential in your confidentiality agreement, once you draft this agreement.<\/p>

When formulating a definition of trade secret, you should pay attention not to overdo or underdo it.<\/p>