What is a non-disclosure agreement?

09 July 2019

If you’re looking to protect some of your important business information, you can use certain laws to block employees from disclosing any. This is a non-disclosure agreement (NDA). In this guide, we’ll look at what it is and how your business can apply it. If you need help with this, you can refer to our 24/7 employment law services for immediate guidance.

Its meaning

An NDA meaning is as follows—a legal contract put in place to prevent people from discussing confidential business information and keeping trade secrets private.

How to use it in your organisation

Through the use of an NDA, UK businesses can protect essential information. A non-disclosure agreement between employer and employee is typically reserved for more senior employees or those with a more detailed understanding of business operations. For example, you may wish to put in place a non-disclosure agreement for IT employees due to the information they may have access to. Yet there’s no restriction on issuing an employee non-disclosure and confidentiality agreement. You can request that all staff sign an NDA as a standard business procedure if you wish. Generally, it’s signed by individuals as a part of their contracts of employment. Alternatively, you may require a non-disclosure agreement for resigned employees when an individual announces their plans to leave the company.

The purpose of an NDA

The main aim is to protect sensitive information from falling into the hands of a competitor. Under current legislation it’s perfectly acceptable to ask staff to sign one—the government offers guidance on NDA usage. However, their use is under the spotlight in recent times, with suggestions they can help to cover up and facilitate sexual harassment in the workplace. When used correctly and for legitimate business purposes, NDAs can form a useful part of a successful business by protecting intellectual property. But you still need to make sure NDAs are used appropriately as opposed to creating a scenario that fosters bullying, harassment or racist behaviour towards staff. They should also remember that an NDA cannot legally prevent an employee from blowing the whistle on unlawful behaviour.

Using a non-disclosure agreement template

It’s advisable to make use of one of these to clearly outline the information an employee shouldn’t disclose. A non-disclosure agreement template in the UK should also help to ensure you can legally put this in place. It’s also a good idea for you to still seek further advice when implementing NDAs as this can help you gain access to an employee non-disclosure agreement template free of charge. But for reference, the general structure of your NDA should include the following structure:

  • Introduction: Explaining the company policies and what you intend to achieve with the contract.
  • Company’s trade secrets: Outline what you classify these to be. This may include technical details, employee information, or customer data.
  • Non-disclosure of trade secrets: Explains the obligations your employee has with regard to the information you want to protect.
  • Return of materials: Covers what an employee should do when they’re leaving your business.
  • Confidentiality obligations: Detail what employee’s role is in maintaining business integrity.
  • General provisions: Covers the essential legal processes, such as jurisdiction, governing law, and insurance.
  • Notice of immunity: Explains the rights of employees.
  • Signatures: Ensure the correct individuals sign in agreement of the contract.

Need some guidance?

If you’re still struggling with this issue, get in touch and we’ll talk you through what’s involved: 0800 028 2420.

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