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Bryan E. Kuhn
Counselor at Law, P.C.
Business & Employment Law Attorney

Why employers get sued over non-disclosure agreements

Colorado is a hub for startups in the tech and financial space and in other popular sectors. Many employers have their workers sign non-disclosure agreements (NDAs) to give them an edge on their competition. 

In recent years, stories have emerged about employers using NDAs to silence employees who endured sexual harassment. There are cases that workers covered by NDAs have been successful in overturning that had to do with their agreements being too broad in scope. This may leave you wondering which details you can — and cannot — include in your NDAs.

Things to consider before drafting a non-disclosure agreement

Each industry has its own code of ethics and standards. There are also regulatory agencies that have their own reporting requirements in place. You must also obey laws or otherwise run the risk of exposing yourself to legal liability. You’ll want to apprise yourself of all of these before even thinking about drafting your NDA.  

There’s a trend among judges to invalidate NDAs that are too vague. You’ll want to be specific about the exact trade secret you’re looking to protect and measures you’d expect a worker to take to maintain privilege. 

Judges will also often throw out NDAs if they restrict employees from disclosing their employer’s unlawful treatment. This happened with many sexual harassment victims who came forward as part of the “Me Too” movement a few years ago. 

Does your NDA contain information that could nullify it?

Many employees expect to sign an NDA before taking a job, especially in certain industries. It’s likely that they’ll carefully weigh the restrictions that the NDA places on them before they do so. A fair non-disclosure agreement should balance the company’s needs with the rights of the employee. Make sure that your company’s NDA conforms with all the appropriate laws and regulations to avoid complications later. 

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