When Should Employers Use Nondisclosure Agreements?

April 9, 2018Media Mention
Society for Human Resource Management

Nondisclosure agreements (NDAs) are used for a variety of reasons—including to protect employers' sensitive business information. But when should NDAs be used, and what types of information should be protected?

News about overreaching noncompetes that prevent low-wage earners from working for competitors and NDAs that may silence victims of harassment have motivated state legislators to regulate employer use of restrictive covenants. But NDAs can still be used to safeguard sensitive information, employment law attorneys said.

If an employer has valuable proprietary information or trade secrets, then it absolutely makes sense to require employees to sign NDAs, said Karina Sterman, an attorney with Greenberg Glusker in Los Angeles. This is the case especially because most trade-secret protection statutes require employers to show that they took reasonable steps to protect such information to preserve its secrecy.

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