Skip this step for now
Everything You Need to Know About the Non-Disclosure Agreement in Alabama
What is a non-disclosure agreement (NDA)?
The non-disclosure agreement, statement, or clause, refers to a legal contract that outlines the details of confidential materials, knowledge, and information shared between at least two parties. For the validity of this document and the protection of business/ trade secrets, the parties have to sign the NDA to indicate that they have given their consent not to divulge the information that is contained in the agreement.
In the process of protecting trade secrets, the document creates confidentiality and a confidential relationship between the parties involved in the agreement. The NDA indicates that the parties can only share information with each other and that they will protect the information and also restrict access to the information by third parties.
The NDA will, therefore, protect all non-public trade secrets. Note that the NDA is also called a confidentiality agreement.
Some of the most common uses of NDAs include the protection of crucial business secrets using employee non-disclosures. The employee non-disclosure is one of the most important elements of your free Alabama non-disclosure agreement since it protects and preserves the sensitive information held by the company. The NDA comes in handy especially if you know that the revelation of the information to the public or the competition would mean the loss of their competitive advantage hence the need for the document.
Type of NDAs
Unilateral NDA – this is the NDA that discloses information to one party that is required to keep the information a secret.
Bilateral NDA – this refers to the document that is created when both parties involved supply information or trade secrets to each other, and either party must keep the information a secret. It’s also called a mutual NDA, and it is common in joint ventures, partnerships, or mergers.
The primary elements of an NDA
Definition of the kind or category of information whose secrecy is to be preserved: For validity, the confidentiality agreement in Alabama must name the materials or the information to be kept private. The information must be in writing.
Exclusions: if there is information that is known to the receiving party and it’s related to the NDA either because the information is in the public domain or because the person obtained the information before signing the document, the disclosing party must outline that information in this section. The information must have been obtained or learned legitimately. The receiving party will not be liable for any damages if these details result in losses.
Obligations: this section indicates what is expected from the receiving party, other than preservation of the business secrets. The receiving party must restrict access to the information by other employees, independent contractors, and third parties. And if any of these parties require the information, they should sign an NDA. Also, the receiving party should not copy, publish or print the information without the approval of the disclosing party.
Time periods: this section of the NDA states how long the information is to be kept a secret. In most cases, the NDA will remain effective until the information is no longer regarded a trade secret or after the disclosing party notifies the receiving party in writing that they are releasing them from the obligation of keeping the information a secret.
Other clauses: Severability (if the court finds one part of the NDA to be invalid, the other sections of the document will be interpreted as a representation of the intentions of the parties that sign the document); relationships (the CA creates a confidential relationship between the parties); integration (shows that the parties understand the terms of the agreement), and the waiver clause.
Names and dated signatures, as well as the titles of the parties involved in the agreement should be included for the validity of the document.
Non-disclosures vs. Non-competes
Note that despite the tight hold that the free non-disclosure agreement in Alabama has on business secrets, it does not refrain employees from soliciting customers, working for competitors, or setting up a business that is similar to the business run by the company asking the employee to keep its secrets.
This is where the non-compete agreement comes in. In the context of employment, the non-compete will refrain an employee from getting into a similar profession or trade as the employer for a certain period and in certain locations. While the state considers voiding the contracts that restrain businesses, some exceptions make the non-competes valid. An example is an employee agreeing with their employer not to engage in a similar business or to solicit the employer’s customers.
Do you need an NDA to preserve your trade secrets and to create a confidential relationship with the parties involved in Birmingham, Mobile, Auburn, Montgomery, Huntsville, Tuscaloosa, Foley, Hoover, Cullman, Orange Beach or any other city in Alabama? You might want to download our free non-disclosure agreement forms today.