Results Matter.

What happens if you break a non-disclosure agreement?

On Behalf of | May 8, 2024 | Employment Law

Non-disclosure agreements (NDAs) are effective at safeguarding sensitive information. While they are beneficial to businesses, there are instances where employees might find their application questionable.

Individuals who have left a company may find reasons to break an NDA. Although not a criminal act, such a decision carries significant risks.

The enforceability of NDAs

An NDA prevents the release of a company’s confidential information, such as client lists, trade secrets, original product designs and unique manufacturing processes. However, not all NDAs may hold up in court.

Often, it is the thought of legal action that stops people from disclosing sensitive information. Here are a few factors that may render an NDA unenforceable:

  • Uses overly broad language
  • Lasts for an unreasonable duration
  • Is overly restrictive
  • Aims to conceal illegal activities or prevent whistleblowing
  • Involves coercion or deception upon signing
  • Lacks a clear definition of what constitutes confidential
  • Restricts information that is not a trade secret

Still, even when individuals believe their actions are justifiable, there are serious consequences for violating an NDA.

Consequences of breaking an NDA

Upon discovering a violation, the employer may pursue an injunction or lawsuit for monetary damages. In extreme cases, criminal charges may be brought against the signatory.

Moreover, going against a business may also damage an individual’s professional reputation, potentially hindering their prospects in the industry.

When facing accusations of breaking an NDA or similar issues, consulting with an attorney may provide crucial insights. They can scrutinize the agreement for any aspects that could make it unenforceable and provide representation if necessary.

Despite having compelling reasons to break an NDA, understanding the weight of such a decision is crucial.