What Should You Do If A Company Breaks Their NDA

What Should You Do If A Company Breaks Their NDA
A man signing a NDA agreement

Non-disclosure Agreement (NDA) is a common element in many businesses and collaborations. The agreement offers a sure way to protect confidential information that should not be acknowledged to anyone else but the contractor and the worker. Such agreement usually includes client information, plans for work, manufacturing process, new products, and so on.

Such an agreement is usually made, so the company’s secret remains kept and protected. But what happens if the other side breaks the NDA? What can you do if you find yourself in such a situation?

If a collaborator or an employee violates your non-disclosure agreement, there are many methods you can use to protect yourself and your company’s information or product.

  • Misappropriation boils down to the possession or disclosure of confidential information by improper or unauthorized ways. This can be done through theft, fraud, and bribery, or hacking.
  • An employee gives away confidential information to a reporter or blogger who later shares the information with the media.
  • Another company offers an employee a higher salary in exchange for the secrets of the company the employee works for.
  • A hacker breaks into secured files and shares the info with the public/
  • A prototype device is stolen from the designer’s home or office and goes into the competitors’ hands.

Laws that protect confidential business information or trade secrets are based on the Uniform Trade Secrets Act (UTSA). It sets ahead concrete rules about confidential information and trade of secrets. These laws protect processes and techniques, formulas, devices, patterns, drawings, programs, and codes. In some states, the law protects customer lists as trade secrets.

Related: How an NDA Can Help your Business

The NDA has been violated, now what?

No matter how the NDA was violated (hacking, trading information from an employee for a bigger salary, etc.), there are several methods you can use to salvage the situation.

Investigate how the theft of information occurred – Once the secret information is out, you need to find out how it happened. This is not an easy thing to be done since you will need precise evidence explaining how the info got out. If this is not something you can do, then you will be responsible for legal expenses racked up by both sides under the provision of the USTA rules and the rules from your NDA. While working on gathering information, seek ways how the secret got out, how the confidential information was used, and count the financial value of the information.

You will have to review the original document. Most of the methods you can use to help yourself in such cases are written in the NDA. Read it carefully. You need to determine what legal claims should be taken. In such cases, you will have to pursue damages from the stolen information. You can use legal help such as copyright infringement, breach of fiduciary duty, trespass, conversion, misappropriation of trade secrets, and patient infringement.

Non-disclosure agreements are an excellent way to secure confidential information. It is crucial to be aware of how such legal agreements work, before creating one and give it to your employee or collaborator to sign it. Your knowledge about the way NDA functions will help you to find legal ways of protection in case the NDA is broken. Sure, it can happen, but it does not mean that it is impossible to save the situation.

Violation of NDA has consequences 

This is a legal contract that carries consequences if broken. If you break the NDA and your employer finds out that you have shared confidential information with the public or another firm, your job is at risk. The NDA probably has a built-in employment end. This is one of the consequences if you violate the NDA.

Even if the contract does not have this feature, it is very likely that your employer will end the collaboration with you and might also sue you for financial damage that occurred as a result of the NDA violation.

If you find the whole process complicated (learning and knowing all the legal stuff), make sure you contact a business lawyer that will explain everything you need to know.

Contact our business lawyers and let them help you with any transactional legal services, including general business law to entrepreneurs and transactional legal matters such as small businesses and start-ups, but also and developed companies. We serve all business sectors and provide services that include general counsel legal services, commercial transactions, employment counseling, loan closing, business formation, business financing, corporate governance documents.

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