19 Oct Non-Disclosure Agreement and Confidentiality Clauses in an Employment Law Context

Non-disclosure agreements (NDAs) and confidentiality clauses are regularly used in employment law to protect confidential information. These legal documents restrict employees from sharing sensitive information they may have access to during the course of their employment. However, the use of NDAs and confidentiality clauses has come under scrutiny in recent years, particularly in high-profile cases of workplace harassment and discrimination.

What is a non-disclosure agreement?

A non-disclosure agreement is a legal agreement that prohibits one or more parties from disclosing confidential or sensitive information. NDAs are commonly used in business transactions, partnerships, and employment agreements. In an employment context, NDAs are used to protect trade secrets, business strategies, intellectual property, and other confidential information that an employee may have access to in the course of their employment.

What is a confidentiality clause?

A confidentiality clause is a contractual provision that requires an employee to keep certain information confidential. Unlike an NDA, which is a separate legal agreement, a confidentiality clause is typically included in an employment contract or a company policy. Confidentiality clauses may apply to a wide range of information, including customer lists, marketing strategies, financial data, and other sensitive information.

NDAs, confidentiality clauses, and employment law

Employers may require employees to sign NDAs or confidentiality clauses as a condition of their employment. However, there are legal limitations to the use of these types of agreements. In particular, NDAs and confidentiality clauses cannot be used to prevent employees from speaking out about workplace harassment, discrimination, or other illegal activities.

Under federal law, employees have the right to report workplace discrimination and harassment without fear of retaliation. This means that NDAs and confidentiality clauses cannot be used to prevent employees from discussing such issues with other employees, law enforcement, or regulatory agencies.

State laws may also impose restrictions on the use of NDAs and confidentiality clauses. In some states, employers are required to provide employees with a written notice informing them that they cannot be prevented from reporting workplace discrimination or harassment.

Moreover, employees who sign NDAs or confidentiality agreements must be given ample opportunity to review and understand the terms of the agreements. Employers cannot pressure employees to sign these types of agreements, and employees must be allowed to seek legal advice before signing them.

Conclusion

NDAs and confidentiality clauses are important legal tools that employers can use to protect sensitive information and trade secrets. However, the use of these agreements is not without limitations. Employers must ensure that the terms of these agreements comply with federal and state laws, and employees must be given the opportunity to understand the terms of the agreements before signing them. If you are an employee who has signed an NDA or confidentiality clause, it is important to understand your rights and responsibilities regarding the handling of confidential information.