How Can Employees Legally Challenge an NDA?

 Posted on November 29, 2024 in Business Law

A non-disclosure agreement (NDA) is an essential legal tool for businesses. NDAs are confidentiality agreements that can help protect a company’s intellectual property, including patents, trade secrets, content, client data, and more. When a business wishes to hire new employees, signing an NDA can be one of the first steps in the recruiting process.

A well-drafted NDA clearly defines what information must remain confidential and allows the employer to take legal action against employees who violate it. However, a poorly constructed NDA can be difficult for employers to enforce and may lead to breaches of confidentiality. Therefore, it is crucial to make sure your NDA is drafted by an experienced Connecticut corporate attorney.

What Are the Elements of a Strong NDA?

For an NDA to be enforceable, it should contain certain elements such as:

• Clear definitions: An NDA with vague definitions may not hold up in court. For example, saying "X agrees not to divulge any company information" is not legally sound. Make sure your NDA clearly defines what information is confidential, such as client lists, financial data, or algorithmic data.

• Fair time limits: An NDA that prohibits disclosure of confidential information "in perpetuity" or for many years may be less enforceable than an agreement that sets a more reasonable time limit.

• Compliance: All clauses in the NDA should be compliant with Connecticut laws and regulations. Prohibiting discussions about wages or forbidding whistleblowing goes against state employment law and can invalidate the NDA.

When Can Employees Challenge an NDA?

In some situations, an employee who breaches a confidentiality agreement may be protected by the law. For example:

• Whistleblowers: An employee who reports an employer for illegal activity may be protected by whistleblowing laws. Divulging confidential information in the course of reporting financial or sexual misconduct at a company, for example, may be legally acceptable.

• No freedom to work: If the NDA makes it difficult for an employee to find new employment, it may be considered invalid by a court. For example, a confidentiality agreement that prohibits an employee from discussing industry information is too broad a scope and can block that individual’s attempts to find work in the same industry.

• Unlawful restrictions: An NDA that places restrictions on employees in violation of National Labor Relations Act (NLRA) laws and Connecticut labor laws may be struck down by a court. This includes prohibiting an employee from discussing his or her wages and working conditions with others, which is a right that is protected by labor laws.

Contact a Greenwich, CT Employment Law Attorney

An NDA can provide strong legal protection for a business’s interests, but one that is poorly drafted can be invalid and leave a company legally exposed. At Ivey, Barnum & O'Mara, LLC, our attorneys are experienced in drafting strong, robust agreements that give businesses the legal protections they need. Call 203-661-6000 now to schedule a free consultation with a Metro New York Area confidentiality agreement lawyer today.