If you have ever been asked by a company you worked for to sign a contract promising that you will keep sensitive company information confidential, you are not alone. If you are now the owner of or executive at a company, you may wish to have your employees sign such contracts as well. This makes sense, but you should be aware of some pitfalls that have been associated with these contracts.

Capping whistleblower rights

As explained by the Harvard Business Review, some nondisclosure agreements have been accused of essentially banning an employee from reporting illegal or unethical behaviors or actions. When a confidentiality agreement moves into this territory, it can be seen as more of a gag order than a legitimate contract designed to protect honest business interests.

Preventing future employment opportunities

Some NDAs have included provisions that were so broad that they all but prevented workers from continuing their careers. Provisions barring a person from working in a specific field may be problematic. For this reason, it is important to carefully scope all nondisclosure agreements so that they do not become overly prohibitive. The scoping may include reasonable lengths of time during which they will be in effect and appropriate and narrow geographic restrictions. Crafting these things carefully may increase enforceability if and when needed.

This information is not intended to provide legal advice but is instead meant to give employers in New York an overview of how or when they may wish to use nondisclosure agreements with their employees to protect their business interests without infringing on the rights of their employees.