A non disclosure agreement is a written legal contract between an employer and employee. The non disclosure agreement lays out binding terms and conditions that prohibit the employee from disclosing company confidential and proprietary information. A non disclosure agreement is in effect for the duration of an employee's employment and for a period of time following employment termination.
A non disclosure agreement is also used in other circumstances including:
- management and senior level job interviews during which company confidential information is discussed,
- consultant or contractor contract and assignment discussions and products resulting from contractual work,
- vendor discussions that involve products, parts, and other proprietary information sharing, and
- situations involving stock or company purchase, due diligence, or any interaction during which confidential information is shared.
Employers benefit from non disclosure agreements because they keep these parties from sharing proprietary knowledge, trade secrets, client or product information, strategic plans, and other information that is confidential and proprietary to the company with competitors.
Non disclosure agreements state that the signer cannot disclose or in any way profit from company confidential information supplied.
Non disclosure agreements frequently claim company ownership of anything that is developed, written, produced, or invented during or as a result of employment, contracts, services, or interviewing if it is in any way related to the scope of the company's business.
A non disclosure agreement should offer a clause that allows an employer to sign off on or give permission to the signer to use company proprietary information.