A non-disclosure agreement (NDA) is more than just swearing to secrecy. It is a legally binding contract that establishes a duty of privacy and obligates the parties to maintain the confidentiality of any specified information. Our Seattle corporate law attorneys outline the steps a business owner should consider if an employee violates an NDA agreement.
What Is a Non-Disclosure Agreement?
Non-disclosure agreements establish a confidential relationship between two parties. In signing the agreement, the parties agree not to share sensitive information they may obtain. NDAs can also be referred to as confidentiality agreements. Businesses entering into negotiations with other businesses often sign non-disclosure agreements. These agreements allow parties to share sensitive information without fear that competitors will access it.
Steps to Take After NDA is Broken
You could take a few crucial steps if you discover an NDA has been broken.
Document the Violation
The first step in investigating an NDA breach is gathering all the facts. By far the most critical step because the evidence you obtain will determine whether you can seek retribution and prevent further loss of confidential information. You will need concrete proof to answer the following questions to make a strong case in court:
- What was the method of obtaining/leaking the information?
- For what purpose was the confidential information used?
- Who was involved in the breach? Is it an employee? A competitor?
Often, it is difficult to gather enough evidence to connect all the dots when investigating an NDA breach. An experienced business litigating attorney can help with this.
Discuss the Matter with a Business Litigator
Next, you should have your attorney review the NDA and the evidence so they can suggest the best course of action. A cease and desist letter will likely be sent if the evidence is substantial. This letter is also called a 'Demand Letter' and contains the following information:
- A reminder of the terms of the non-disclosure agreement.
- Evidence that the NDA has been breached.
- Demand a specific action, commonly to stop sharing/using confidential information.
- An indication of what will happen if the accused does not comply within a particular timeframe
At this juncture, there are usually two outcomes:
A. The breaching party stops, and you come to a settlement. or
B. The cease and desist letter is ignored.
Take Legal Action
Depending on which legal grounds you have, you may be able to sue the person leaking confidential information if they ignore the cease-and-desist letter. A few legal claims can be made, such as:
- Breach of fiduciary duty
- Misappropriation of trade secrets
- Copyright infringement
- Patent infringement
If the court rules in your favor, the breaching party will be ordered to stop disclosing the information and return it to the owner through an injunction. Additionally, the court may impose monetary damages on the party who breached the contract.
Have Northwest Business Law LLC on Your Side
Our business litigation team has more than ten years of experience helping our clients get the compensation they deserve. If you have experienced a violation of an NDA, get in touch with us by calling Northwest Business Law LLC or filling out our online contact form. Time is of the essence with cases like these.