Free Washington DC Non-Disclosure Agreement

All You Need to Know About the Non-Compete and Non-Disclosure Agreement in Washington DC

When running a company that prides its success on the protection of its intellectual property rights, trade secrets, and other forms of confidential/ proprietary information, you have to do all you can to protect the information. There should be no room for 'Oops I told XYZ about our business practices' or anything of the kind.

This means that when you are hiring new employees, engaging with your leads or clients, as well as investors, vetting is not enough. Even with an excellent track record, you need to make sure that the employee, contractor, client, or investor will not use your trade secrets slip because they will have signed an NDA.

A confidentiality agreement in Washington DC, also called an NDA (Non-disclosure agreement) will do everything word of mouth cannot do, as long as your terms are reasonable. First, you need to download a free Washington DC non-disclosure agreement and then you need to make sure that it has all the essential components needed to make the document enforceable.

  • But, before we look at the details of the NDA, when does it make sense to use the free non-disclosure agreement in Washington DC?

    • During a presentation for a business idea or an invention with your potential investor, business partner, or a distributor (client).

    • If sharing marketing, financial, or operational information with consultants or prospective buyers, as well as acquiring companies.

    • When you need to grant new employees access to the business' confidential information and trade secrets

    • When showcasing new technology or prototypes to a licensee or a prospective buyer

    • You also need the contract when receiving sensitive information on services required by your company.

Types of NDAs

Unilateral NDA: A unilateral NDA is created between two parties, the disclosing party, and the receiving party. The disclosing party expects the receiving party to protect the confidential information shared and in the event of a breach, the receiving party is held liable for damages.

Bilateral/ Mutual NDA: As the name suggests, this is a contract drawn by two parties disclosing company secrets to the other. By signing the agreement, both parties promise to protect the trade secrets of the other.

The Elements of the Agreement

  • For enforcement, there are specific elements of the NDA that should be adhered to and incorporated in the document. They include:

    • The Identification of the receiving and the disclosing parties

    • An accurate definition of the confidential information. To avoid a breach of contract, you need to ensure that the contract defines the confidential information protected by the NDA, as well as the purpose of the information.

    • The obligations of the receiving party. The recipient has two main obligations: they should not disclose the information unless permitted to and they should not use the confidential information for personal benefits unless permitted to by the disclosing party.

    • Exclusions from the confidentiality contract: this includes the information that is available publicly, the kind obtained from third parties, or information obtained by the recipient using personal knowledge/ through reverse engineering.

    • Signatures of the parties

    • An indication that the receiving party will not be breaching the contract when they comply with a government or court order compelling then to disclose specifics of the trade secret or intellectual property.

What is a trade secret?

A trade secret refers to information that a company or individual derives an actual or potential economic value from; and only because the information is unknown to the public or competitors. The information is, therefore, subject to reasonable efforts needed to maintain its secrecy. This information could be a device, program, compilation, process, formula, pattern, technique, or a method.

Non-compete agreements

  • A non-compete is an employment contract that forbids an employee from stealing, using, or trading trade secrets to third parties or direct competitors when they are no longer working for the company. It forbids any form of competition that involves use or knowledge of trade secrets, confidential, or proprietary information. The restriction not to compete spans a specific duration and a specific geographical radius, but, it is only enforceable if its terms are reasonable. In DC, the non-compete will only be enforced if, on top of being reasonable:

    • It's ancillary to the contractual employment relationship

    • It doesn't have a wide and an unreasonable geographical and time scope

    • If it doesn't impose any undue hardship on an employee or if it doesn't disregard public interests.

    • A reasonable and sufficient consideration must support it.

This means that the contract is only acceptable in court if it meets the state's standards on scope, benefits, purpose, as well as enforcement.

Purpose: this is the reason why an employer wishes an employee to execute the agreement

Benefit: what the employer gets if the employee signs the contract

Scope: this covers the restrictions on duration an employee protects the sensitive information, as well as the employee's obligation against solicitation, competitors the employee cannot work for, and clients the employee cannot solicit.

Enforcement: this section determines whether the court will enforce the agreement as it's written or not and if blue penciling is acceptable to modify the contract.

To get started on NDAs, download our free non-disclosure agreement forms accessible from any part of Washington DC.