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What should you do about a broken NDA?

On Behalf of | Aug 16, 2022 | Firm News |

Companies include restrictive covenants in their contracts to protect against employee misconduct. Non-disclosure agreements (NDAs) are a crucial form of protection for companies that have a lot of competition or that have very valuable trade secrets.

Workers with access to proprietary information, like your company’s chemical processes or client lists, are workers who could damage your company if they misuse that information after leaving the business. Your non-disclosure agreement prevents someone from sharing your company secrets frivolously, but you may need to enforce it.

How do you protect yourself when a former worker has violated an NDA?

Document the violation

The first step you need to take is to gather evidence of the alleged violation. Did they share a video on social media exposing one of your recipes? Has one of your clients advised you that they just heard from a competitor that now employs that former worker?

However you come to learn that a prior employee has breached their NDA with your company, you need to keep records of what you learned, especially if you can show a negative impact on your business’s operations or reputation. That evidence will play an important role if your case goes to court.

Notify the former worker of the suspected breach

Sending someone written notice when you know that they have violated a written agreement with your company is an important move. While claiming ignorance won’t necessarily prevent them from having any financial or legal responsibility for their actions, it can put you in a position where you will have more to prove in court.

Sending an appropriate letter outlining the alleged breach and advising them of the possible penalties if they do not remedy the situation immediately can get some people to cease the misuse of information obtained while working at your business. Others will continue doing what they want regardless of how your company seeks to influence them.

Present a compelling version of the case to the courts

If you are unable to settle the matter independently, then you and your former employee may soon find yourselves embroiled and civil litigation. For the courts to uphold an NDA, it will typically need to do with your trade secrets.

In court, you will need a preponderance of evidence supporting your claim that there was a breach of the NDA and as much documentation as possible of any negative effect that breach has had on your business. Although many such matters resolve outside of court, your company may need to present the situation to a judge to secure the best possible outcome.

Taking assertive steps to push back when a former employee breaches a non-disclosure agreement with your company will help protect your market share and trade secrets.