Reasons for Creating a Non-Disclosure Agreement in Virginia with Your Employees
While trust takes the crown as the most important virtue, people break trust for others all the time. At its worst, close family members are unable to trust each other. Unfortunately, the high level of mistrust is worse in the workplace with employees looking for ways of getting ahead; most of them acting illegitimately, for personal interests.
Of course, there are a few good apples in the mix, but as an employer running a company whose competitiveness and success relies on sensitive proprietary information and trade secrets, you cannot assume that your employees will maintain the secrecy of the trade secrets. So, you have to take protective measures, even before you hire some of the best talents to protect your house. A non-disclosure agreement (NDA) or a confidentiality agreement in Virginia does all this if enforced well.
A non-disclosure agreement is a legally binding contract used by employers, inventors, entrepreneurs, and startups to protect the business' most confidential information. The information protected is unknown to the public, and it could be the only reason why a company anticipates significant growth in revenue.
This article outlines the main reasons why you need to download a free Virginia non-disclosure agreement form the fill it out to meet the needs of your company.
It protects against possible loss of trade secrets
Under the Uniform Trade and Secrets Act, trade secrets refer to information - formula, program, device, pattern, compilation, process, method, or technique - that a company uses to get an independent economic value (potential or actual) by keeping the information away from the public.
The protected information is not readily/ easily ascertainable by other parties who might derive an economic advantage from the information. Note that this information is subject to reasonable efforts in the maintenance of the secrecy of the information.
The protection of the trade secrets is essential, especially in this technological age where information can be lost in one move. And, with employees leaving the workplace seeking green pastures, they will be taking the trade secrets with them - some secrets don't have to be written to be remembered. This possesses a considerable level of risk to your company, hence the need for NDAs.
You can trust an NDA because it is a legally binding document which gives an employee the legal obligation to protect your trade secrets. Once it is signed, the free non-disclosure agreement in Virginia will stop the employee from misusing the information or for personal gains.
You can heighten the restrictions of your NDA by incorporating non-compete and non-solicitation clauses. These clauses are effective once an employee leaves your company.
Non-compete agreements: the non-compete refers to an employment contract that limits an employee's ability to use or disclose/ steal your trade secrets and proprietary/ confidential information like customer lists. Being one of the most restrictive covenants in the protection of trade secrets, it tends to come with extra conditions for its enforcement.
While you want to make sure that the ex-employee does not work within a 100-mile radius of your company for 3 years, you must validate this reasoning. So, the courts will look at the reasonableness of the NDA. Some of the elements checked for reasonableness include:
Whether or not the non-compete strikes a balance between the protection of a business' legitimate trade secrets/ interests and the employee's right to find meaningful employment in the area, they're trained
Whether the restrictions of the non-compete make sense, considering the size and type of the company
If the time and geographical restrictions make sense
Whether or not the employee received any benefits when they signed the non-compete. This is also called consideration. The state has not accepted implicitly initial or continued employment offers as sufficient consideration, but it regards continued employment alone insufficient consideration.
The state only enforces non-competes where the terms are reasonable or necessary for the protection of the trade secrets or the employer, along with any other confidential information.
Non-solicitation agreements: this clause forbids ex-employees from soliciting the customers they worked with under their previous employers. It also stops the employee from starting their own company using the trade secrets of their previous employer.
NDAs create a psychological deterring effect on the receiving party. This is possible because employees are least likely to disclose trade secrets when they know that they signed a document and they could be easily sued if they breach the contract.
Clarification of the information that is regarded as confidential
Though it is all obvious to an employer, some words could get lost in translation. You need to make sure that the employee knows what the confidential information is and what it is not. By indicating that the algorithms, customer lists, and leads, or future innovations fall under the confidential information category, you are certain that your employees will handle such information carefully and protect it.
It clarifies IP rights
Would you like to clarify your ownership for intellectual property further? Get your employees to sign NDAs. The NDA will protect your IP rights for all your inventions including software, technical design/ process, or code. The protection of IP rights extends to inventions by your employees - unless otherwise stated the employee owns those rights. To ensure that the IP rights to employee inventions are transferred to you, you should explicitly state this in the NDA.
Get started with our non-disclosure agreement forms available online and easily accessible from Virginia Beach, Norfolk, Richmond, Williamsburg, Charlottesville, Roanoke, or any other city in Virginia.