A non-disclosure agreement is legally binding tool for companies and other parties to protect private and sensitive information. For current and former employees who sign a non-disclosure agreement, it is important to understand the terms of the contract and what happens if you break the terms of the non-disclosure agreement.
What is a Non Disclosure Agreement?
A non-disclosure agreement is a contract between two parties that states one or more parties will not disclose certain sensitive or private information that is established in the contract. There are many reasons why a non-disclosure agreement may be put into effect, typically occurring either after an employee gains access to key information or after they leave a company.
The purpose of a non-disclosure agreement is often to protect the company by preventing private information about it or its clients from becoming public information, given to a competitor or to someone who may be able to hack their online systems.
There are numerous reasons why a non-disclosure agreement may be implemented, extending to doctors and patients, attorneys and clients and in a range of other professional relationships.
What Can Happen When Someone Breaks a Non Disclosure?
A business requiring a non-disclosure agreement is able to take legal action if the terms of the agreement are not followed. A non-disclosure agreement should outline the information that is to be kept confidential, what information is excluded and the time period in which the agreement is in effect.
While some choose not to pursue legal action when someone breaks a non-disclosure agreement, a serious breach that the creating party can prove may lead to a lawsuit. There are different types of lawsuits a party may file if the terms of the contract are breached, which include legal action to collect on monetary damages, actual losses and compensation for a damaged reputation.
Lawsuit for Money Damages
A party may choose to take legal action if the other party breaches the terms of the non-disclosure agreement and it leads to financial loss.
One example would be if an employer terminated an internet technology employee and required upon that termination, a non-disclosure agreement stating non-disclosure of any private company information but the former employee then released customer lists, private emails, or other restricted information to a competitor resulting in the loss of multiple clients or other financial damage by the breach of the contract, this action would be sufficient grounds for a lawsuit.
In this example, if the company can prove the former internet technology employee released the private and sensitive information, then they can seek legal action in the form of financial compensation for the monetary damages they suffered as a result of the release of the data.
Lawsuit for Actual Losses Suffered by Your Employer
A lawsuit for actual losses goes beyond the potential financial losses a company suffers from an employee breaking a non-disclosure agreement. A lawsuit for actual losses may also include all expenses the employer suffers, including legal fees and investigative costs.
If a company must act upon a breach of contract by the other party, then they may seek compensation for all actual losses they have as a result of the other party breaking the non-disclosure agreement.
Lawsuit Seeking to Enforce an Injunction Against You
An employer may seek to enforce an injunction against someone who violates the terms of a non-disclosure agreement. An injunction is a court order that directs someone to stop a certain action.
In the case of breaking a non-disclosure agreement, the injunction lets the individual know that they must stop providing or using the private or sensitive information that is protected by the non-disclosure agreement. It also notifies the party that further legal action will be taken if they do not abide by the injunction.
How Do I Know if I Broke a Non Disclosure?
It is important to fully understand the terms established in the non-disclosure agreement. The document should clearly outline what information is privileged and not to be disclosed and what information may be excluded from the non-disclosure. This lets all parties involved know how to follow the agreement. Any information that is disclosed that is included in the non-disclosure could be considered a breach of contract and legal action may be taken.
Speak to an Employment Law Attorney Today
Non-disclosure agreements may be difficult to comprehend. Having an employment law attorney on your side can be helpful when negotiating and interpreting the terms of the non-disclosure agreement. To learn more about non-disclosures and other aspects of employment law, reach out to our friendly team today.
