As a business owner, you might have trade secrets that you want to keep confidential or protected. Whatever your motivation is, the best way to ensure that your legal business practices remain within the confines of your business is to have employees or interviewees sign what is called a Non-Disclosure Agreement or NDA. In this article, we give a general overview of non-disclosure agreements.
What are Non-Disclosure Agreements?
Non-disclosure agreements are contracts between two parties where one party agrees to keep secret confidential information, well, confidential. This is a requirement in exchange for access or knowledge to the secret. Florida courts rule that NDAs are legal and will enforce them as long as they meet certain legal requirements.
Basic Requirements For Non-Disclosure Agreements
Under current Florida law, there are basic four requirements that an NDA must meet for the courts to enforce them. The requirements are as follows:
- Must not be vague
- Time consideration
- Responsibility of documentation
Must Not Be Vague
For an NDA to be enforceable, it must clearly define the subject of the NDA. In other words, an NDA needs to specify what information would be considered secret or confidential and needs to outline what forms of communications will apply. If the NDA is vague or ambiguous, then it may not hold up in court.
For an enforceable NDA in a Florida court, the NDA must define the time limit in which the NDA binds the signer. It is possible, however, to have an NDA last indefinitely. For this to happen, the NDA needs to specify that the terms of the NDA are indefinite and there has to be a valid reason for it. An example would be an employee who has access to Coca-Cola’s guarded recipe. In this situation where the company has a vested interest to ensure that Coca-Cola’s recipe is never made public, the Coca-Cola company may require the employee to sign an NDA for an indefinite period and it would most likely hold up in court.
Responsibilities of Documentation
If there are any documents that that were shared between the parties, then the NDA needs to outline that documents either need to be returned or destroyed. To ensure that the NDA will be upheld, it should also describe the process of how the documentation shall be returned or destroyed. An example of a specific clause would be for an NDA to say that all non-electronic memorandums must be shredded at the corporate office during business hours. In this example, the clause specifies what documentation as well as how, when, and where to destroy it.
For an NDA to have any enforcement, there must be something that can be enforced. That is the remedy. The remedy can be financial damages and/or injunction relief. The remedy should be specific and must be related to the damage. For example, if violating an NDA costs a company $10,000, then the company cannot seek damages of one million dollars.
Despite the numerous NDA templates widely available on the internet, these templates might not be enforceable under Florida law. Your best protection to ensure you have a legitimate NDA is to contact an experienced attorney familiar with Florida law. The attorneys at Dowd Law have written many NDAs for our clients and are available for a consultation.