What is a nondisclosure agreement?

A nondisclosure agreement, also known as an NDA or a confidentiality agreement, is an agreement where a party accepts a clear and explicit duty not to disclose or improperly use confidential information that is shared with that individual. These agreements typically cover an extended period of time - thus, an employee who executes a nondisclosure agreement agrees not to use or disclose the information even after the employment has ended. For such an agreement to be enforceable, the agreement should clearly define what information falls within its protection.

An employer with valuable trade secrets should require all employees with access to those trade secrets to execute such a nondisclosure agreement.