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How can a nondisclosure agreement help your business?

When you have valuable business secrets, you want to do anything to protect them. You may have a vendor or contractor who needs your secrets to fulfill a contract. Or you might have a new business plan that you don’t want your employees to take to another company. In these cases, you can prevent others from stealing your business secrets with a nondisclosure agreement or NDA.

A nondisclosure agreement is a legal contract that prevents those with knowledge of your business secrets from sharing them. Here are a few ways an NDA can protect your business:

Trade secrets in the tech industry: What to expect

Innovation and the tech industry are intimately linked. Big tech companies spend billions of dollars every year trying to stay ahead of the competition, employing thousands of people to work on cutting-edge projects meant to give their product a leg up.

With this push for constant innovation comes a real risk: the theft of trade secrets. It’s a problem the tech industry will have to brace for, with a recent high-profile case offering a clear example.

Want a new job but already signed a noncompete agreement?

The purpose of a noncompete agreement is to prevent you from working for your company’s competitors. Your employer may be concerned that you will share information that could harm the company’s prosperity.

In Colorado, there are only four circumstances in which an employer can require an employee to sign a noncompete agreement.

State's new noncompete law may help you keep your doctor

Doctors are commonly asked by their employers to sign noncompetition agreements when they’re hired to a new position. Few patients are even aware of this possibility and what it could potentially mean to them. Nonetheless, some patients have been disturbed to realize how such agreements can directly affect them.

Colorado recently enacted a new statute affecting physicians who treat rare disorders and changing the contracts drawn up by companies that employ these medical professionals. The new law limits the power employers wield over these employees when they depart the firm and continue their practice elsewhere.

Pet doctors fight back against noncompete agreement

A pair of veterinarians have taken on one of the world’s largest veterinary care conglomerates, fighting a noncompete clause that they suggest unfair business practices.

The lawsuit highlights the rapid consolidation of the pet healthcare industry, as well as growing resistance to covenants to not compete. While you may not be a veterinarian or pet owner, you’re likely to eventually face the prospect of signing a covenant to not compete.

Tips for protecting trade secrets

Trade secrets are very special type of intellectual property. Any secret business information that gives a company a competitive edge qualifies as a trade secret. Unlike other forms of intellectual property, trade secrets are special because there is no limit to the time that you can hold onto its rights.

That said, they can also be gone in a literal flash. Holding onto a trade secret is entirely based on keeping it confidential. The moment this important information becomes public, it no longer qualifies as a trade secret. Therefore, the goal for anyone holding a trade secret is to protect the information at all costs.

Common mistakes when drafting a non-compete agreement

You have worked hard to mold your business into the successful company it is today. Central to this success are your key employees, who have become an integral part of your business. However, you may worry about what valuable information they may take with them should they eventually part ways with your Colorado company.

A non-compete agreement can promote fair competition and prevent the spread of your confidential information by restricting where employees can go after leaving your company. However, these agreements can be difficult to enforce. Here are four common mistakes when drafting non-compete agreements that can lead to enforceability issues:

When does a nondisclosure agreement go too far?

Chances are high that you will eventually be asked to sign a nondisclosure agreement at some point in your working life. These agreements typically protect the company from the divulgence of trade secrets and attempt to stymie competition in the market.

While these agreements are common, Colorado law protects employees from hyper-aggressive nondisclosure agreements. If you have to sign one, you should be aware of the following before you do:

Can you enforce your noncompete agreement?

It’s the dream: You come up with a plan to cut through the internet’s layers upon layers of clutter and speak directly to your potential customers or clients. And if you can bring this idea to life, you’ll want to protect it, but will your noncompete agreement prove enforceable?

Colorado business owners may be surprised to learn how often their noncompete agreements are worth less than the paper they’re printed on. You want your agreement to protect your trade secrets and to uphold your goodwill in the market, but if you don’t draft and use it correctly, the court might simply declare it void.

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