There are numerous businesses that have information that they make sure not to disclose to the public. Also, there are businesses that want to make sure their employees don’t leak their confidential information, as well as prevent them from becoming potential threats. You may also see agreement samples.
Which is why many of these businesses create non-compete and non-disclosure agreement for their employees to sign. This article will teach you all that you need to know in regards to how you can make either document.
Elements of a Non-Disclosure and Non-Compete Agreement
For Non-Disclosure Agreements:
- Identification of parties: Non-disclosure agreements must be able to point out exactly who is restricted from sharing the company’s confidential information. Be sure to include the complete names of these people by putting in their first name, last name, and middle initial.
- The confidential information: The agreement must point out exactly what information must remain confidential. This can be any number of things that the business does not want an employee to share.
- The scope of the confidential information: This should point out just how the employee is allowed to use the information or if it’s not to be used at all.
- Exclusions from the agreement: This is basically the information that is excluded from the agreement. Common exclusions include information that is already known to the public or by the recipient.
- Terms of the agreement: This should point out just how long the non-disclosure agreement should last. Some may argue that the NDA should last forever, but this will depend entirely on the company’s situation. It’s best to come up with a reasonable amount of time as the information may become obsolete and needs to be changed by then.
For Non-Compete Agreements:
- Type of employment: This is to restrict an employee from working for a competitor that is in the same industry as the company. However, take note that there is no restriction that prevents the employee from finding employment in an entirely different field.
- Timing: Many non-compete agreements specify the amount of time that a departing employee must wait before finding employment in the same industry. Anywhere from two to five years is standard, though the specific amount of time will differ according to the type of job.
- Geographical location: Some non-compete agreements allow the departing employee to seek employment in the same industry, but only if he/she finds one that’s outside the geographical area. It’s not uncommon for an employee to be barred from seeking the same work in any city or state that his/her previous company is currently situated in.
- Specified competitors: It’s possible that the non-compete agreement specifies which competitors an employee is not allowed to work for. If you want to restrict an employee from working with a particular business, then just put that business’s name in the non-compete agreement.
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How to Create a Non-Disclosure and Non-Compete Agreement
1.Know what program you’re going to use: The first thing that you’ll need in order to make either agreement would be the right program. Considering that there are so many different types of formats, you must know which one you’ll be going for. For non-compete and non-disclosure agreement documents, you’ll want to make them in Word as that’s the standard format for all business-related documents. A good program to use would be Microsoft Word as it allows you to make the agreement documents in Word or in other formats.
2. Making your non-compete and non-disclosure agreements: Here are the things that you’ll need to do when creating either agreement document:
For Non-Disclosure Agreements
- Define the confidential information clearly to the parties involved.
- State the obligations of the receiving party. It’s here where you’ll point out the duty to hold and maintain the confidential information and the limitations of the recipient’s ability to use it.
- List the different conditions that allow the parties involved to reveal the confidential information.
- Specify how disputes are resolved.
- Specify which laws apply in the event of a lawsuit.
- Add a signature block for the parties involved to sign.
For Non-Compete Agreements
- Remember to point out all of the parties involved.
- Point out the period of time which the non-competing party must not compete with the protected party.
- Describe the activities and industries the non-competing party must not engage in.
- Share the amount of compensation the non-competing party will receive in exchange for accepting the agreement.
Tips for Making a Non-Disclosure and Non-Compete Agreement
- Be reasonable with the restrictions: If you want your non-disclosure or non-compete agreement to be completely enforceable, then you’ll have to be completely reasonable with your restrictions. For non-compete agreements, just make sure that there’s a reasonable amount of time that a departing employee cannot join a competitor that’s in the same industry and that he/she is properly compensated. As for non-disclosure agreements, you must clearly point out the limits of how the information should be used and make sure that they’re agreeable.
- Proofread and edit: To avoid any issues such as unclear terms and conditions on either type of agreement, you’ll have to proofread and edit the documents. This means that you’ll need to check for grammar and spelling errors, as well as checking whether all of the needed information is present or not.
Types of Non-Disclosure and Non-Compete Agreement
Here are a few examples of the different types of non-disclosure and non-compete agreements you can make:
- Non-disclosure and Confidentiality Agreement
- Insurance Non-Compete Agreement
- Business Non-Compete Agreement
- Confidential Disclosure Agreement
- Accountant Non-Disclosure Agreement
- Non Disclosure Agreement for Employee
Non-Disclosure and Non-Compete Agreement FAQs
What If I forget to include information that I do not want to be shared?
Then you will have to draft another non-disclosure agreement that the only will need to go through and sign. This is because you cannot alter a non-disclosure agreement document that has already been finalized and signed by the employee.
How do I make sure that my non-compete agreement is legally enforceable?
All you have to do is to make sure that all of the terms are reasonable. This includes the amount of time the employee cannot compete in the same industry, the duration of the agreement, the names of the different companies that he/she cannot work for, and how the employee should be compensated for entering the agreement. Because in the event that a judge is required to go through the agreement, he/she will have to go through it all to see if it’s fair for both the employee and the business involved.