Breach of Non Disclosure Agreement
When a breach of non disclosure agreement occurs it is important to follow certain steps to protect your rights and assets.3 min read
When a breach of non disclosure agreement occurs it is important to follow certain steps to protect your rights and assets. A nondisclosure agreement is an effective and common legal tool that protects confidential information.
What to Do If Your Nondisclosure Is Breached
These days many startups and businesses ask employees to sign clauses or confidentiality agreements before they can begin employment. A nondisclosure agreement (NDA) is frequently used for employers to protect confidential information surrounding their business.
How Breaches Occur
There are many ways that an employee may breach a nondisclosure agreement. This includes carrying out the following activities without proper authorization:
- Utilizing confidential information to develop a similar business.
- Taking photocopies of confidential information and/or providing insider information to a competitor for financial or personal gain.
- Passing along confidential information to external parties for conspiring purposes.
- Allowing a disgruntled employee to steal confidential information or take it with them after leaving the company.
- Allowing secrets to be shared by the mass media by exposing confidential information to a reporter, blogger, or journalist.
- Revealing a product prototype prior to its official launch.
- Publishing private information on a blog, online media source, or social media.
- Discussing confidential information to another individual in social situations.
- Sharing confidential formulas, designs, plans, strategies, recipes, or any other confidential information with another individual.
Remedies for Breaches
Typically the remedy for confidentiality breaches is monetary damages. Under the Defend Trade Secrets Act of 2016, this may also include attorney fees and any large exemplary damages. However, the majority of company employees do not have the funds to pay monetary damages. A more realistic solution is to obtain an injunction that stops the employee from ever using the acquired confidential information again.
Additionally, employers may take any necessary employment measures, such as:
- Removing an employee's right to access any confidential information.
- Seeking the appropriate disciplinary actions.
- Requiring all confidential information to be returned.
- Firing the employee.
Why Is Seeking an Attorney's Advice Important?
There are several steps to take when faced with a nondisclosure breach:
- Seek advice from an attorney: An attorney should be consulted in the event of a breach of confidentially. The attorney can review the situation and provide legal advice on how to properly handle the case. This includes proposing damage control options to reduce potential losses and minimize the exposure of the confidential information. Attorneys can offer realistic options and give you an idea of your chances of success with each option. Consider that some individuals may choose not to take the case to court, but instead use arbitration.
- It is important to note that if the breach relates to trade secrets, you must verify that you have taken the appropriate security measures to protect your confidential information. This may include such actions like using secure passwords and storing documents in a locked compartment.
- Collect all relevant evidence: Once it's been established that there has been a confidentiality breach, it's important to begin investigating and collecting evidence to support your claim. Being proactive and quickly taking action will lessen the risk that any evidence will be purposefully or accidentally erased. Consider that without proper evidence, you may be unsuccessful in your lawsuit. Additionally, the court may penalize you for a lack of evidence causing you to be accused of defamation or requiring you to pay the defendant's legal fees.
- Assess the magnitude of the breach: In order to properly seek damages in a legal court, a monetary value of the confidentiality breach must be determined. This will help assess the magnitude of the breach and clarify the amount of payable damages you seek. An attorney will be able to help calculate both the monetary value of the breach and/or the confidential information. Remember that the more evidence that you can collect, the easier it will be to explain your case.
- Review company procedures and revise any policies to improve the security measures: During this time, you may discover some loopholes or gaps in current company procedures that may need to be revamped to improve security. This may include amending your nondisclosure agreements, internal policies, and confidentiality procedures. Some ideas to promote more effective policies and procedures include:
- Marking confidential information clearly as such.
- Keeping confidential information separate from ordinary company paperwork.
- Storing confidential paperwork in a secure location.
- Holding an exit interview for the disgruntled employee.
- Increasing employee education and training on how to properly handle confidential information.
If you need help with a breach of nondisclosure agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel only works with the top five percent of attorneys. UpCounsel attorneys come from law schools such as Yale and Harvard with an average of 14 years of legal experience, this includes working with or on behalf of companies like Menlo Ventures, Airbnb, and Google.