Is an employer or potential client asking you to sign a California non-disclosure agreement and you’re not sure if it is legally sound? Have you left your job to work in the same industry only to find out you’re being sued or threatened with suit by your former employer because you had signed a non-disclosure agreement in the past?
The Rubin Law Corporation understands non-disclosure agreement litigation, and we are dedicated to protecting your rights as an employee. It is not legal for an employer to restrict you from taking another position as long as you are not unlawfully using sensitive information from that company.
Got questions about non-disclosure agreements and how they can affect you? See below for answers to common questions or call 310-385-0777 to speak to a Los Angeles non-disclosure attorney.
What is a non-disclosure agreement?
A non-disclosure agreement (NDA) is a signed agreement between you and an employer that is designed to help protect an employer’s trade secrets. The trouble for you, the employee, however, is that non-disclosure agreements can be written so broadly that they encompass everything read, learned, taught or seen at a business.
For example, if you work for a pharmaceutical company that makes headache medicine and then left that company to work for one that makes heart medicine, you may have previously signed an NDA that could cause a legal headache for you because both of these companies are in the pharmaceutical field.
Situations like these may be legally sound if the employer is truly protecting a trade secret, but in most cases the employer writes their NDAs in an effort to discourage you from pursuing a career in a related field. In effect, it is an unlawful (and in California) unenforceable non-compete agreement masquerading as an NDA.
An employer is asking me to sign an NDA before accepting a job, what should i do?
The best answer to this question is simple, say no. However, that is usually not the most viable option. The best advice is to read your NDA thoroughly and even have an attorney look over it before you sign. An employer does have a right to protect their company’s trade secrets, however, the scope of that protection is limited.
They can have you sign an NDA if you have access to valuable company data, such as a certain product formula. On the other hand, they cannot have you sign an NDA if they are trying to protect information that would be considered common industry knowledge.
If, for example, five companies compete in an industry where each of the competing companies provides one service or another to a stable of 50 client companies, then even client lists in that circumstance could hardly be deemed confidential (i.e., everyone knows who the customers are, it is the terms and conditions of service that might be of interest).
Incentives and non-disclosure agreements
Many employers will offer current and former employees incentives in exchange for signing an NDA. This practice is both legal and common in the business world and is perfectly acceptable by the courts.
For example, an employee who is leaving may be asked to sign an NDA in exchange for extra severance pay. Also, an employer may request an NDA when hiring a new employee. In this case, the act of receiving the job is considered incentive enough. However, if your current employer asks you to sign an NDA without compensation, then this might well be unenforceable against you.