Employee Non-Disclosure and Confidentiality Agreement Template

What Is an Employee Non-Disclosure Agreement (NDA)?

An employee non-disclosure and confidentiality agreement (NDA) is a legal document that protects a company's sensitive information by ensuring employees and independent contractors do not disclose proprietary information, trade secrets, pricing, or other confidential data during or after their employment. This agreement helps safeguard intellectual property, client data, business strategies, and more, ensuring business continuity and competitive advantage.

What the NDA Should Include

• Definition of Confidential Information: Clearly define what constitutes confidential information, such as trade secrets, technical information, customer lists, financial data, and product designs.
• Obligations of the Employee: Outline the employee's responsibilities, including safeguarding confidential information, reporting breaches, and limiting access to authorized personnel.
• Permitted Disclosures: Specify scenarios where disclosure may be allowed, such as by law, with prior written consent, or in specific business contexts.
• Duration of Confidentiality: Detail how long the employee confidentiality obligations last, often extending beyond the term of employment.
• Return of Materials: Include terms requiring employees to return all company property and materials upon termination.
• Non-Compete and Non-Solicitation Clauses: Optionally include clauses preventing employees from working with competitors or soliciting clients or colleagues for a set period.
• Consequences of Breach: Define penalties for violating the agreement, such as legal action or financial damages.
• Acknowledgment and Agreement: Require the employee’s signature to confirm understanding and acceptance of the terms of this agreement.

Purpose of the NDA

The primary goals of a non-disclosure and confidentiality agreement are to:

• Protect Sensitive Information: Safeguard trade secrets, business plans, and intellectual property.
• Ensure Compliance: Set clear expectations for employee conduct regarding confidential information.
• Mitigate Risks: Prevent unauthorized disclosures that could harm the company financially or reputationally.
• Support Legal Action: Provide a basis for legal recourse in case of a breach.

Sample Employee Non-Disclosure and Confidentiality Agreement

Please note: This sample policy is for informational purposes only and does not constitute legal advice. It is a generic template that may not suit your specific circumstances. When adopting or revising a policy, consult legal counsel to ensure compliance with all applicable laws and regulations.

Employee Non-Disclosure and Confidentiality Agreement

This non-disclosure and confidentiality agreement (“Agreement”) is entered into as of [Date], by and between [Company Name], with its principal place of business at [Company Address] (“Company”), and [Employee Name] (“Employee”), collectively referred to as the “Parties.” The purpose of this agreement is to safeguard sensitive business information and mitigate risk for the organization.

1. Definition of Confidential Information

“Confidential information” refers to all non-public, proprietary, or sensitive information disclosed by the Company to the Employee, including but not limited to:

• Business strategies and plans
• Client and supplier lists
• Trade secret information and intellectual property
• Financial information
• Marketing strategies and product designs
• Software and technology
• Any other information marked or otherwise identified as confidential

2. Employee Obligations

The Employee agrees to:

• Keep all confidential information strictly confidential.
• Not disclose or allow access to confidential information to unauthorized parties.
• Use confidential information solely for the benefit of the Company and not for personal gain.
• Notify the Company immediately of any unauthorized access, use, or disclosure.

3. Permitted Disclosures

The Employee may disclose confidential information only:

• With prior written consent from the Company.
• When required by law, provided the Employee gives the Company prompt written notice.

4. Duration of Confidentiality

The provisions of this agreement shall remain in effect during the term of the Employee’s employment and continue for [Insert Duration] after termination, unless otherwise agreed in writing.

5. Return of Materials

Upon termination of employment or at the Company’s request, the Employee shall return all materials, documents, and electronic files containing confidential information.

6. Non-Compete and Non-Solicitation

For a period of [Insert Timeframe] after the termination of employment, the Employee shall not:

• Engage in business activities with direct competitors of the Company.
• Solicit clients, customers, or employees of the Company.

7. Consequences of Breach

The Employee acknowledges that any breach of this agreement may result in irreparable harm to the Company. In the event of a violation of this employee non-disclosure agreement, the Company may seek disciplinary action including:

• Injunctive relief
• Damages, including legal fees
• Other remedies as permitted by law

8. Governing Law

This agreement shall be governed by the laws of the state and country. As laws and regulations change, this agreement will be altered to maintain compliance. Employees will be notified of any amendments or exclusions made.

9. Entire Agreement

This document represents the entire agreement between the parties regarding confidential information and supersedes any prior agreements.