Sensitive corporate data may require legal protection against unauthorized use and a non-disclosure agreement (NDA) provides that protection. An NDA is a guard against the release of privileged material and preserves the confidentiality of sensitive corporate data. An NDA is most effective way to protect your sensitive corporate data.
Restricting knowledge about your plans, operations, trade secrets and other aspects of your business is important. An NDA can prevent a potential competitor from using your business insights to their advantage and provides a basis for a lawsuit if a violation occurs. A skilled attorney with experience can assist you to draft the right NDA for your business. Due to my years of experience in this area, I have model NDA forms that can be tailored for your specific business needs.
Forbes cites some of the elements that are included in an NDA are the description of the parties, the confidential material involved, the obligations of recipients and an enumeration of the exclusions.
Considering Situations Requiring a Non-Disclosure Agreement
While businesses often need to share proprietary information with other businesses or individuals, an NDA makes sure that the recipient respects the confidentiality of the shared corporate data. Entrepreneur cites some situations requiring an agreement to ensure proper observance of confidentiality.
Access to Sensitive Information
Businesses need to protect marketing data from service providers who have access to customer email addresses, advertising and social media accounts, lead lists and the back-end processes for the business. Financial data that a business discloses during negotiations needs to be protected from a buyer who may use it to leverage a price elsewhere. It is important to keep your sensitive corporate data confidential.
A buy-out or acquisition requires a business to reveal sensitive financial and operational data to potential buyers. An NDA can provide the necessary protection to prevent a potential buyer from using the sensitive corporate data for their benefit.
Partners or Investors
Sharing business financials with potential partners or investors may produce needed funds, but it creates the risk that your sensitive corporate data may be used by competitors for the benefit of their businesses. With the use of an NDA, a business can protect their sensitive corporate data from the potential risk of being shared or used by another business or person.
Even the most trusted employee may not resist the temptation to use your sensitive corporate data for their benefit. Your agreements with suppliers and manufacturers, client lists, salary structure, contracts, marketing plans and operations deserve to be kept confidential.
Understanding Acceptable Releases of Information
The American Bar Association acknowledges that a business or person may obtain information in an acceptable manner, that will not be afforded confidential treatment such as:
- Information from a generally accessible source;
- Information that someone receives that is not covered by a confidentiality agreement; and,
- Information that someone has developed independently.
Deciding to Use an NDA
It is important to protect your sensitive corporate data from others who may use the information for their benefit and to your detriment. That being said, there are situations that do not warrant an NDA. An attorney specializing in NDA’s can help you identify the situation in which the use of an NDA makes sense.
An online form may appeal to a layperson who wants to develop an NDA. One must remember that a poorly drafted NDA will provide little or no legal protection for your sensitive corporate data. Every business needs an NDA occasionally. Bryn Peterson has reviewed and negotiated thousands of NDA’s and has the experience and expertise needed to help you navigate the nuances of an NDA.
Choosing Efficient Legal Representation
Bryn Peterson’s knowledge includes contracts, real estate, mergers and acquisitions, capital projects, insurance, risk management, taxation and audits. As internal legal counsel for multimillion and multibillion-dollar corporations, he gained experience that will benefit Mercer Island and Seattle residents. Bryn Peterson is an experienced business law attorney on Mercer Island and provides legal support on a range of corporate matters.