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What to do if an Employee Violates a Confidentiality Agreement?

On Behalf of | Mar 19, 2019 | Firm News, intellectual property & trade secrets

Employers have numerous tools at their disposal to protect their business and the elements that make it competitive. One such tool is a non-disclosure agreement, or NDA.

An NDA is a contract that prohibits signing party from sharing or otherwise misusing protected information, including the company’s trade secrets (which are usually defined in the NDA). If an employee, for example, shares protected information (whether intentionally or unwittingly) in breach of the NDA, the employer can take legal action to enforce the agreement.

Immediately after an alleged breach

If you suspect or know that an employee or former employee has violated their NDA, the sooner you act, the better. Immediately, you should collect critical data such as the employee(s), the recipient, and what information was disclosed. Then, take steps to prevent further violations. This can include changing passwords and access credentials, and physically moving any files with sensitive data to a more secure location.

Pursuing a legal claim

Contacting an attorney right away can also be crucial. The sooner you hire an attorney, the sooner you can stem any damage that may have been done, as well as assess the damages that may have been caused. After reviewing the facts that you collected, your attorney would likely (a) send a cease and desist letter; (b) conduct further investigation either personally or with the help of a private detective; and (3) evaluate whether to file a complaint to recover damages or enforce the cease and desist demand.

Focusing on your company’s future

In addition to being promptly reactive to a breach of an NDA, you should periodically reevaluate which employees should enter into the agreement and what properties it should include to protect sensitive information. Reminding employees and third parties with an NDA of the repercussions of violations can also be helpful.

Knowing what to do after an alleged breach of an NDA can be very difficult, especially in a chaotic environment. However, employers would be wise to refer to the NDA itself and a legal representative for guidance.