If you violate the terms of a legally binding non-disclosure agreement, your employer can take legal action to obtain an “injunction” to prevent you from continuing to commit illegal acts. In addition, in certain circumstances, an employer may file a claim for damages for any loss related to your breach of confidentiality obligations. Note that Massachusetts law allows a court to double the amount of damages if deemed appropriate. Any agreement between an employer and a Massachusetts employee that requires the employee not to disclose certain information they have learned in the work environment is a non-disclosure agreement. Because they require employee confidentiality, these contracts are usually referred to as confidentiality agreements. A confidentiality agreement is a legally binding contract that states that two parties do not share or benefit from confidential information often used by companies. Read 9 min In general, confidentiality agreements are enforceable if they meet the general requirements of a contract. However, because of their potential to limit employees` occupational mobility by limiting their ability to seek free employment opportunities after leaving a position, there are legal principles at the state and federal levels that specifically address non-disclosure agreements. While the information contained in a confidentiality agreement is always unique, these documents fall into two key categories. Breach of a confidentiality agreement can result in potential fines or other legal and reputational implications. Taking the disclosing party to court is always an option, but without a confidentiality agreement, the litigation will be longer and more costly. Like non-compete obligations and other contractual restrictions, most courts require that any confidentiality agreement be “reasonable.” A unilateral or unilateral confidentiality agreement states that one party will not disclose information in the possession of another party. This is the most common type of confidentiality agreement.
It is often used when a company hires an employee and wants the new employee to protect proprietary information. A non-solicitation clause prevents the recipient from withdrawing business from the disclosing party or cooperating with its customers. A non-compete obligation prevents the recipient from setting up its own business in direct competition with the disclosing party`s business or from disclosing confidential information to another competing company. The confidentiality agreement may set time limits for non-solicitation and non-compete obligations, but the time limits must be fair and reasonable to be enforceable. Non-disclosure agreements (NDAs) have become almost synonymous with the protection of confidential information. This type of agreement is essentially a legal contract that expressly prohibits the disclosure or use of proprietary information without permission. Massachusetts courts view restrictive agreements in a negative light because they tend to unduly burden a former worker`s employment opportunities. Judges will only enforce a non-disclosure agreement that complies with the state`s trade secrets law. Each situation is different, but some factors that could lead a court to declare a confidentiality agreement unenforceable are: A bilateral or mutual confidentiality agreement stipulates that both parties do not disclose the other party`s information. It is most often used when two companies work together and agree to protect each other`s data. This may be the case, for example, if one company wants another to license its products. Since non-disclosure agreements are usually created in a commercial context and this is not done as a national or social agreement, it can be assumed that there are intentions to establish legal relations through this type of agreement.
In general, recipients of confidential information are subject to an express obligation to keep the information confidential and not to disclose it to third parties, unless expressly authorized in the agreement. The recipient`s duty is often linked to a certain standard of care. For example, the agreement may require the recipient to maintain the confidentiality of the information with the same level of care as that used to protect its own confidential information, but no less than a reasonable level of care. A binding contract must be justified by a counterparty. This means that the person signing the confidentiality agreement must receive something in exchange for their promise. Therefore, confidentiality agreements are required to be valid. Although they are not often accepted by venture capitalists and most start-up investors, non-disclosure agreements are generally popular in companies that are highly productive in developing new inventions and innovations (such as Apple, Hewlett Packard and Microsoft), startups, companies that work with trade secrets like Coca-Cola and KFC, and other entrepreneurs who have proprietary information. Start-ups often don`t require venture capitalists to sign confidentiality agreements.
Indeed, investors are unlikely to sign the deal and it is more important to get funding than to protect their new ideas. Confidentiality agreements can be adjusted based on the details of the situation, but often some standard sections apply. The agreement shall specify the party or parties concerned, the purpose of the confidentiality, the duration of the agreement and the obligations of the recipient(s) of the confidential information. .