Free Non-Disclosure Agreement

NON-DISCLOSURE AGREEMENT THIS NON-DISCLOSURE AGREEMENT (the "Agreement") dated this ______ day of _________, ______ BETWEEN: ____________________ of ________________________________________________________________________________ (the "Employer") OF THE FIRST PART - AND -

1. The Employee is currently or may be employed as an employee with the Employer for the position of: ____________________. In addition to this responsibility or position (the "Employment"), this Agreement also covers any position or responsibility now or later held with the Employer.
   
2. The Employee will receive from the Employer, or develop on the behalf of the Employer, Confidential Information as a result of the Employment (the 'Permitted Purpose').

IN CONSIDERATION OF and as a condition of the Employer employing the Employee and the Employer providing the Confidential Information to the Employee in addition to other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, the parties to this Agreement agree as follows:

1. Confidential Information will also include any information that has been disclosed by a third party to the Employer and is protected by a non-disclosure agreement entered into between the third party and the Employer.
   

1. Information that is generally known in the industry of the Employer;
   
2. Information that is now or subsequently becomes generally available to the public through no wrongful act of the Employee;
   
3. Information rightly in the possession of the Employee prior to receiving the Confidential Information from the Employer;
   
4. Information that is independently created by the Employee without direct or indirect use of the Confidential Information; or
   
5. Information that the Employee rightfully obtains from a third party who has the right to transfer or disclose it.
   

1. to such employees, agents, representatives and advisors of the Employee that have a need to know for the Permitted Purpose provided that:
   
   1. the Employee has informed such personnel of the confidential nature of the Confidential Information;
      
   2. such personnel agree to be legally bound to the same burdens of confidentiality and non-use as the Employee;
      
   3. the Employee agrees to take all necessary steps to ensure that the terms of this Agreement are not violated by such personnel; and
      
   4. the Employee agrees to be responsible for and indemnify the Employer for any breach of this Agreement by their personnel.
      

   Avoiding Conflict of Opportunities

   1. solely or jointly with others undertake or join any planning for or organization of any business activity competitive with the current or anticipated business activities of the Employer; and
      
   2. directly or indirectly, engage or participate in any other business activities which the Employer, in their reasonable discretion, determines to be in conflict with the best interests of the Employer.
      
   1. induce or attempt to induce any employee or contractor of the Employer to quit their employment or retainer with the Employer;
      
   2. otherwise interfere with or disrupt the Employer's relationship with their employees and contractors;
      
   3. discuss employment opportunities or provide information about competitive employment to any of the Employer's employees or contractors; or
      
   4. solicit, entice, or hire away any employee or contractor of the Employer.
      

   This obligation will be limited in scope to those persons that were employees or contractors of the Employer at the same time that the Employee was employed by the Employer.

   Ownership and Title

   1. was developed without the use of any equipment, supplies, facility or Confidential Information of the Employer;
      
   2. was developed entirely on the Employee's own time;
      
   3. does not relate to the actual business or reasonably anticipated business of the Employer;
      
   4. does not relate to the actual or demonstrably anticipated processes, research or development of the Employer; and
      
   5. does not result from any work performed by the Employee for the Employer.
      

   Return of Confidential Information

   1. may contain or be derived from ideas, concepts, creations, or trade secrets and other proprietary and Confidential Information as defined in this Agreement; or
      
   2. is connected with or derived from the Employee's services to the Employer.
      
   1. ____________________
      ________________________________________________________________________________
   2. ____________________
      ________________________________________________________________________________

   IN WITNESS WHEREOF ____________________ and ____________________ have duly affixed their signatures under hand and seal on this _____ day of ______, _______________.____

   Witness Name: ____________________________

   Witness Name: ____________________________

   What is a Non-Disclosure Agreement?

   A Non-Disclosure Agreement (NDA), also known as a Confidentiality Agreement, is a legally binding contract between parties who agree to keep certain information confidential. It is a commonly used business tool for the purpose of protecting confidential or proprietary information, or trade secrets from being disclosed to third parties who would benefit from the information. NDAs are used by businesses in a variety of situations including with employees, contractors, consultants, partners, distributors, etc., essentially anyone with whom in the course of doing business, you would disclose, or they would otherwise become aware of confidential information, that is subject to protection, and that were it disclosed or misused, would threaten or harm your business. Some information may not need to be held in secrecy after the end of the business relationship, but some information will need secrecy to continue even after the termination of the business relationship. As long as the NDA is deemed reasonable by the court, a party guilty of breaching an NDA might be sued for monetary damages and ordered to pay lost profits, and/or receive a court-ordered injunction notice forcing them to stop further release of the information. In most cases, the plaintiff gets both monetary and injunction relief.

   Types of NDAs

   An NDA can be unilateral (one-way) or mutual between both/all parties. A unilateral NDA is common with employers and employees, vendors or clients. A mutual NDA is a contract signed by two or more parties expected to protect the trade secrets of the other(s). A mutual NDA is common between businesses or partners for mergers, collaborations, and other joint ventures

   Types of Information Included in an NDA

   Not all types of business information are subject to protection, and the terms for keeping the information confidential vary based on the type of information. Excluded information includes that which is available in public, information from third parties, or information that the receiving party obtains independently. Information subject to protection in an NDA can be classified as either “ordinary confidential information” or “trade secrets.” Ordinary confidential information covers technical and marketing information, including such things as manufacturing processes, technical procedures, designs, sketches, analyses, source codes, customer lists, marketing strategies and pricing models. The time limitation term for ordinary confidential information is usually 2, 3, or 5 years. Courts typically will not enforce perpetual/indefinite terms for non-trade secret information.

   What is a Trade Secret and Why is It Special?

   Trade secrets are a special type of confidential information. The simplest explanation of a trade secret is just that, information that should be kept secret for trading purposes because it is essential to commercial viability of the business. The statutes recognize trade secrets as information, device, process, program, compilation, technique, method, formula, recipe, software, which gives the owner of the information a competitive advantage because the information is unknown to others. Examples of trade secrets are the recipe for Coca-Cola and the “11 herbs and spices” used to make Kentucky Fried Chicken. It’s easy to see that were these trade secrets disclosed to others such as the public, media, and competitors, that would negatively impact their businesses. For good reason, non-disclosure terms for a trade secret have no time limits and can last forever, so you should never place a time limit on how long a trade secret should be kept confidential.

   Be Specific.

   An NDA must be very specific, or it will not be enforced in the Courts. You must identify and include the specific details of the information regarded as confidential. Do not use general phrases because lack of specificity is a loophole that makes it hard to enforce that the information is subject to protection or prove that it has been breached. Also, be very specific in detailing the obligations of the receiving party, including things that they can and cannot do with the information.

   More About Terms and Time Limits

   It’s important to clearly understand when the period of confidentiality is meant to begin and end. There’s a difference between the time limit based on the Agreement itself, and the time limit based on when the disclosure of the confidential information is made. If a time limit is applied to the Agreement itself, the clock starts ticking from the date of the Agreement, not from when the disclosure is made. Likewise, there is a difference between when the Agreement itself terminates, versus when the period of confidentiality ends. You can also select a specified date in the future for the end date of the confidentiality, providing that it is reasonable.

   When to Use Non-Compete/Non-Solicitation Clauses

   Non-compete and non-solicitation clauses are common in employment engagements where the employee is forbidden from working for companies in direct competition with, stealing customer/client lists from, or hiring employees away from their former employer, and even starting their own companies, as that would directly compete with their former employer. These restrictions are time and geographically specific. Courts generally frown on Non-compete/Non-Solicitation Clauses that severely limit a person’s ability to find a future job or make a living and will not enforce unlimited/indefinite terms for such.

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   Sample Non-Disclosure Agreement