Non-disclosure/Confidentiality Agreements
Non-disclosure agreements are known as confidentiality agreements; also known as confidentiality disclosure agreements, and non-disclosure contracts. A non-disclosure agreement (NDA) is a legal agreement between a minimum of two parties which outlines information the parties wish to share with one another for certain evaluation purposes, but wish to restrict from wider use and dissemination. The parties agree not to disclose the non-public information covered by the agreement.
The purpose of a non-disclosure agreement is twofold: confidentiality and protection. NDAs are commonly executed when two parties are considering a relationship/collaboration together and need to understand the other’s processes, methods, or technology solely for the purpose of evaluating the potential for a future relationship.
NDAs are generally required when two companies enter into discussions about doing business together but want to protect their own interests and the details of any potential deal. In this case, the language of the NDA forbids all involved from releasing information regarding any business processes or plans of the other party or parties.
Some companies also require that new employees sign an NDA if the employee has access to sensitive information about the company. The NDA is commonly a provision in a non-compete agreement.
“Confidential Information” means any information that is proprietary or unique to a Company and is disclosed by a Company to the Recipient during the term of his or her employment, including, but not limited to, the following: trade secret information; matters of a technical nature such as processes, devices, techniques, data and formulas, research subjects and results; marketing methods; plans and strategies; information about operations, products, services, revenues, expenses, profits, sales, key personnel, customers, suppliers, and pricing policies; and any information concerning the marketing and other business affairs and methods of a Company which is not readily available to the public.
The definition of “Confidential Information” is intended to have the broadest meaning as permitted by law and extends beyond the definition of “trade secrets” as set forth in the Uniform Trade Secrets Act.
Effective March 18, 2019, the New Jersey Legislature passed a law, L. 2019, c. 39, § 2, supplementing the LAD and preventing enforcement of nondisclosure agreements in employment contracts or settlement agreements, as follows:
A provision in any employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment (hereinafter referred to as a “non-disclosure provision”) shall be deemed against public policy and unenforceable against a current or former employee … who is a party to the contract or settlement. If the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the nondisclosure provision shall also be unenforceable against the employer.
Generally speaking, non-disclosure agreements are enforceable in N.J. in the vast majority of instances.
To discuss your NJ business law matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Business Law Attorney