Enforcement of a Non-Disclosure Agreement in Minnesota
A confidentiality agreement, also known as a non-disclosure agreement (NDA) refers to a legally binding document used to protect confidential information and trade secrets from falling into the wrong hands like direct competitors, the media or the public.
In the confidentiality agreement in Minnesota, trade secrets refer to the information (method, technique, progress, compilation, program, or formula) that a company uses to derive its unique independent advantage or value, actively or potentially from being kept a secret.
So, by virtue of being a well-kept secret to a company, the company has a competitive advantage and the disclosure of the information results in the loss of the competitiveness of the company.
The trade secret could also be information that is a subject/ or consideration of reasonable efforts and circumstances that keep the information a secret. So, if you have an algorithm that gives your company its competitive edge, it's a trade secret.
An enforceable NDA contains specific elements, and even after downloading your free Minnesota non-disclosure agreement form, you should only sign it after you confirm that the document has its essential segments. These segments/ clauses include:
Definition of the information that is regarded as confidential: This is the information that you want to keep away from your competitors and the public. To enhance the power of the NDA, you should be specific about that trade secret you are protecting, and you should also indicate how the information is transmitted - verbally, electronically, or in writing. There should also be an Exclusions Clause which indicates the information that is not regarded as confidential.
Obligations: The obligations of the parties, especially the receiving party will range from the need/ assurance that the receiving party will protect the information and restrict access to the information.
This clause also covers what the receiving party can do with the information and should another employee, an investor or an independent contractor request the information, the receiving party can share the information on a need-to-know basis, with persons requiring more details having to sign an NDA.
The free non-disclosure agreement in Minnesota also has a clause on disclosure. Should the court, an administrative body, or a government agency compel the receiving party to disclose the details of the trade secret, they should notify the disclosing party immediately, and only disclose the information if it is absolutely necessary.
The receiving party is also required to return all material relating to the NDA upon receipt of a written request from the disclosing party
Timeframes: the NDA must stipulate how long the information is to remain confidential. This time limit must be reasonable.
Signatures: the disclosing and the receiving parties must sign the NDA to show that they agree to the terms of the NDA. While the NDA creates a confidential relationship, it should be noted that the relationship is non-binding and either party can opt out of the relationship/ contractual arrangement at any time.
Enforcement and remedies
In the event of a breach, the court will - upon ascertaining that the NDA is enforceable - issue two types or reliefs; a monetary or an injunctive relief
The injunctive relief refers to a court order that stops the party in breach of the contract from disclosing any more information. On the other hand, monetary relief is the cash payment paid by the defendant to compensate the plaintiff from the losses suffered or the lost profits following the disclosure of the trade secret.
In most cases, plaintiffs receive both reliefs because one relief, especially the injunction relief, does not provide enough relief for the pain and losses suffered.
Would you like to institute measures that will stop an employee with access to your most sensitive information from working with your direct competitor or setting up a practice/ company running on the information gathered from your company? A non-compete will make that possible. All you have to do is to indicate how long the restriction lasts and how far from your company the ex-employee cannot work. These terms should be reasonable for enforcement.
To be considered reasonable by the courts, the non-compete must establish a balance between the company's need for an unfair competitive advantage and the fact that the employee should have the right to work in the field they are trained. There is also a consideration - what you get from agreeing to keep the secret: the courts deem initial/ continued employment, an added benefit, or anything with substantial professional or economic benefits to be sufficient consideration.
Note that geographic and time reasonableness depends on many other factors including profession, size of the business, and the effects the restriction will have on the public.
Non-solicitation agreements in Minnesota
This contract prevents an employee from soliciting clients/ customers from the companies they used to work at. Again, the terms of this contract should be reasonable.
Would you like an NDA in Duluth, Minneapolis, Saint Paul, St. Cloud, Bloomington or any other Minnesota city? Get started with our free non-disclosure agreement forms.