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HR Soapbox

HR lesson from DC drama: Should you require staff to sign NDAs?

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Patrick DiDomenico

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HR lesson from DC drama: Should you require staff to sign NDAs?The scandal de jour in Washington swirling around Omarosa Manigault Newman, a fired White House aide who wrote a tell-all book, has ignited a debate about the appropriate—and legal—use of nondisclosure agreements (NDAs) to block employees from disclosing information about a past employer.

While NDAs may help protect your organization’s trade secrets if you have genuine secrets to protect, many companies don’t. If yours is one of them, instead consider issuing a simple confidentiality policy that tells employees what you consider confidential and how you expect them to treat such information.

Consider the ‘Why’

Before drafting an NDA, consider what you want to protect and how and why leaks are likely to occur. Three things to consider:

  1. Safeguarding proprietary information: You likely have customer lists and marketing strategies you’d prefer to keep private. And your customers depend on you to keep their information confidential. You may also have proprietary production methods, recipes, research and so on that contribute significantly to your company’s success.
  2. Stopping leaks: Leaks are as likely to occur through “loose lips” as through intentional misappropriation. Your best protection against loose lips is to make it clear to employees thatHR lesson from DC drama: Should you required staff to sign NDAs? company information is to be treated confidentially and then follow that yourself by safeguarding proprietary information from casual perusal. Give employees access to it only on a need-to-know basis and discipline any employee who breaches your policy.
  3. Theft: An NDA may help you protect your business from unfair competition by making such employees aware of both their legal obligation to protect proprietary information and your intention to use the full force of the law to enforce your policy. For additional protection, you may want to consider asking key employees to sign a noncompete agreement.

So does your company information need nondisclosure protection? Answer these questions to see if you should have workers sign NDAs (the more affirmative answers, the more legitimate an NDA may be.)

  • Is knowledge of the information greatly limited outside of the company?
  • Is knowledge of the information purposely limited even within the company?
  • Does the company take reasonable measures to protect the secrecy of the information?
  • Is the information very valuable to the company and its competitors?
  • Did it cost a great deal in time, money or effort to develop the information?
  • Would it be hard for others to obtain or produce the information?

Whether you decide to draft an NDA, a confidentiality policy or both, be sure to define what you consider proprietary or confidential information. Offer some examples. Make it clear, however, that the information covered in the agreement or policy isn’t limited to those examples given.

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