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What should your nondisclosure agreement include?

A nondisclosure agreement is useful to employers that want to protect their private information. For example, an employee could cause serious damage to a company if he or she was allowed access to sensitive information, like client lists and confidential information. For this reason, Texas employers may request that new employees sign such an agreement -- so that their trade secrets and other information remains confidential.

Not all nondisclosure agreements, however, will hold up in court. For this reason, employers need to ensure that they prepare a legally valid document. In order for a nondisclosure to be legally valid, it needs to have the following five elements:

  • The agreement needs to clearly define what is to be considered "confidential" in the context of what cannot be disclosed and what cannot be shared by the employee.
  • The agreement should include a list of anything that will be excluded from confidentiality.
  • The agreement will outline the duties and obligations of the person who is to receive the confidential information.
  • The agreement will clarify a specific timeframe within which the agreement will remain in effect.
  • The agreement could contain miscellaneous provisions that apply to the unique agreement specifically.

When drafting a nondisclosure agreement it is vital that the agreement be considered "reasonable." When a court deems that a nondisclosure agreement is unreasonable, it could nullify it during court proceedings. As such employers may want to work carefully with an experienced business litigation attorney to ensure that they have drafted their nondisclosure agreements in a manner that conforms with Texas state legal standards.

Source: FindLaw, "A Nondisclosure Agreement," accessed July 28, 2017

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