How to Create a Non-Disclosure Agreement in Vermont
You may not know this, but your trade secrets will be protected by the provisions of the Uniform Trade and Secrets Act even when you forget to create an NDA? But, why do we insist on the of the confidentiality agreement in Vermont? Well, if you don't ask someone to sign a document/ contract agreeing to protect your trade secrets, the nod of the head or an affirmative 'I promise' will not do much.
And by the time you involve the courts, you may never get back the competitive advantage you enjoyed when your trade secrets were unknown to the public or your competitors. Also, humans are more likely to keep their mouths shut when they sign documents rather than agreeing verbally.
Before we look at how to create the non-disclosure agreement (NDA), what are trade secrets?
A trade secret refers to the information that a company uses to derive its independent, actual or potential, economic value as long as the information is not readily available in public or not easily ascertainable through legal means by other persons. The information is also subject to the reasonable effort put into place and under circumstances that maintain the secrecy of the information. The information regarded as a trade secret could be a program, a compilation, a device, pattern, formula, method, process, or technique.
Creating an NDA
First, you have to download a free Vermont non-disclosure agreement form online. You need to make sure that the template downloaded has all the essential elements required for the enforcement of the NDA. The essential elements include:
A concise description of the information that is regarded as confidential: Could be marketing strategies, business practices, vendor/ customer lists, software, accounting/ financial information, samples, prototypes, hardware configurations, or inventions, among others.
Purpose: besides the accurate description of the NDA, there's need to highlight the main reason why the NDA is important and why the information should be kept a secret. Just make sure that your trade secret is legitimate or you obtained it legitimately.
The obligations of the receiving party: the recipient of the trade secrets should not disclose the information or use it for their personal benefits if not permitted. If compelled by the court, the recipient must disclose the trade secrets although they should notify the disclosing party of the development as soon as it happens.
Exclusions: the NDA should indicate that information that is already out in the public, information obtained from third parties, or information that the recipient finds through reverse engineering is not regarded as confidential information.
Time: It should be indicated in the NDA how long the contract lasts. The duration will vary but in most cases the recipient hands over the information after a specific time, after the expiry of the NDA, or after an event. The duration during which the non-disclosure remains in effect is essential for the enforcement of the document, as is the geographical restrictions you incorporate in terms of the agreement. For the court to rule in your favor, you need to ensure that the time and geographical scopes are reasonable and that they will not inflict hardships on the receiving party; especially the employee.
Signatures: your free non-disclosure agreement in Vermont will only be enforceable if the parties to the NDA sign it.
The parties must sign the NDA
Indicate the duration during which the receiving party is expected to protect the information. The amount of time indicated must be reasonable.
Types of NDAs
Unilateral NDA: this is also called a one-way NDA. It features two parties: the receiving party and the disclosing party. The receiving party needs to keep the information shared confidential at all costs because they will be liable in the event of a breach. It is common with employers, inventors, entrepreneurs, and startups.
Bilateral NDA: this contract is also called a mutual NDA thanks to the fact that both parties are disclosing parties and they expect the other party to keep the details of the trade secret confidential.
When more parties are involved, then a multilateral NDA could be created. This is, however, uncommon.
A non-compete refers to an employment contract used by employers when they wish to prevent employees from competing with them once they leave employment. The non-compete prevents competition by forbidding the ex-employees and disgruntled employees from stealing trade secrets and proprietary information like customer/ vendor lists.
For enforcement, this contract should strike a balance between offering protection for the company's legitimate trade secrets from unfair competition; and the right of the employee to continue working in a trained field. It should also be reasonable in terms of the time and geographical restrictions put in place by the disclosing party.
Note that the state of Vermont will only enforce non-competes that protect a company's business interests, as well as the goodwill, investment in training the employee, and existing customer relationships. There should also be sufficient consideration or price paid to protect trade secrets. Initial employment offer or continued employment is deemed sufficient consideration. Also, the time and geographical scope should be considerable.
Would you like an NDA in Montpelier, Stowe, Brattleboro, Burlington, Rutland City, Bennington, Woodstock or any other city in Vermont? Get started with our non-disclosure agreement forms available at no cost.