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Non-Disclosure Agreement: What is It, and What Happens If You Break It?

Posted on June 24, 2015 by Mintzer Law

top secret

In the business world, companies can go to great lengths to protect their trade secrets. One of the most common legal ways that businesses protect their secrets is to establish a non-disclosure agreement. A non-disclosure agreement is a formal arrangement that is used to prevent employees from divulging important information, usually classified business information.

For example, if a company is developing a new product, they may ask their employees to sign a non-disclosure agreement, or NDA. In this way, the company will have legal options if any of their employees violate the terms of the NDA.

Non-Disclosure Agreement Information

Although non-disclosure agreements are relatively common, they can be somewhat complex. They are a type of legal contract that contains specific details about the information that the company wishes to remain confidential. They typically contain several elements:

  • An agreement not to divulge certain information
  • Protection of intellectual property rights or patent rights
  • A specific description of the information that is to remain confidential
  • Information about how long the agreement is to remain valid

Anyone who signs a non-disclosure agreement is officially agreeing to abide by its terms. Violating the terms of the agreement can legally be considered a breach of the contract. In this way, the creators of the contract will have legal standing to take legal action against the contract violators.

Consequences of Breaking an NDA

A non-disclosure agreement can be violated in a number of ways. One of the most common ways that these disclosures are violated is called a misappropriation. A misappropriation occurs when secret company information is given to unauthorized parties through deceit, fraud or other inappropriate means. For example, misappropriation could occur if:

  • An employee receives a bribe to reveal secret information
  • Secret information is stolen directly from a company
  • A computer hacker breaks into a company’s secret files

When an employee violates the terms of a non-disclosure agreement, their company may choose to enact penalties against them. These penalties may vary based on the actual terms of the specific agreement. The penalties can also be determined based on the actions of the person who violated the agreement. For example, a person who breaks the terms of an NDA could be charged with:

  • Trespassing
  • Breach of contract
  • Copyright infringement
  • Patent infringement

Depending on the monetary value of the stolen information, the penalties could range from mild to severe.

Legal Penalties

Many different penalties could be applied for a person who is convicted of breaking a non-disclosure agreement. These penalties will usually be related to the nature and severity of the actions that violated the order. For example, some typical penalties could include:

  • A fine
  • Mandatory restitution of the value of the stolen information
  • Job termination
  • Loss of future job prospects
  • Jail time
  • Court probation
  • Legal Defenses

By hiring a defense attorney, a person who is charged with breaking an NDA may be able to build a strong legal defense. In these types of cases, a legal defense may involve introducing evidence showing that the defendant was not responsible for the lost company information.

For example, an attorney could argue that the lost or stolen information was not the responsibility of the defendant. The attorney could introduce evidence that showed that other people had access to the information at the time that it was lost or stolen. The attorney could also argue that there is insufficient evidence to link the defendant to the loss of the information.

If this defense is successful, the charges against the defendant could be reduced or dropped entirely. In some cases, even a defendant who is convicted may be able to have their criminal record sealed. This may allow them to obtain jobs in their field in the future.

If you haven been accused of sexual assault, it’s important to get legal representation immediately. Contact the law office of Rand Mintzer today. We will fight hard to protect your rights and future. Call (713) 862-8880 or email for a free, confidential consultation.

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