Having employees sign non-disclosure agreements (NDAs) can be a frequent practice, especially for positions working with sensitive company information. This type of contract can be beneficial, defining clear conditions that employees can keep in mind while performing their tasks. However, this document can also have disadvantages in specific scenarios, possibly outweighing its benefits.
Is the NDA absolutely necessary?
NDAs can be applicable in various situations, not just when hiring an employee. If the transaction involves confidential information, an NDA could be essential. Still, some scenarios might not need an agreement, including it only as a formality.
This practice can adversely affect employees, legally binding them to significant confidentiality when unnecessary. The implied mistrust and needless burden can also foster negative sentiments, damaging the relationship between the employer and employee.
Using NDAs only when needed
Employers and employees alike can benefit from only using NDAs when needed. Depending on the situation, these contracts can be costly to create, so it can be beneficial only if the following information types are at risk:
- Client details, including financial information and other data
- Trade secrets and other intellectual properties
- Sensitive details involving operations, marketing and payroll
An NDA may be unnecessary if the employee’s job does not involve these data.
Approaching NDA issues appropriately
A new employees can refuse to sign the NDA if they feel the need to do so, but it can have consequences, such as losing the position to someone willing to comply as a requirement. Additionally, an NDA can have designated timelines that may remain effective long after the employee leaves the company.
If there are any issues or conflicts involving NDAs, seeking legal guidance can be advantageous. Before reacting defensively because of its conditions, it could be helpful to get valuable advice to clarify any misunderstandings and address issues that may arise.
