KY Nondisclosure Agreement Attorneys Lexington Noncompetition Agreement Lawyers
Full of rewards and challenges, there’s no doubt that a lot goes into running a successful business.
Markets, capital, advertising, and personnel are all essential components that must be balanced with a company’s proprietary needs. Two common documents that address those needs are nondisclosure agreements and noncompete agreements, which provide restrictions as well as guidelines aimed at protecting sensitive corporate information.
With over 35 years of experience, the Fayette County business lawyers at Bunch & Brock are committed to providing each of our clients with a high level of personal service. We know the challenges faced by new businesses as well as established ones. Whether you are in the beginning stages of forming a business or just need a document review, we take the time to fully understand your situation and discuss your options. We are dedicated to helping you make your dreams of successful business ownership an ongoing reality.
Lexington Nondisclosure Agreement Attorney | KY Lawyer
Also known as confidentiality agreements, confidential disclosure agreements, or proprietary information agreements, nondisclosure agreements (NDA) are legal contracts that restrict the use or dissemination of company-owned confidential information. It is the business world’s equivalent of keeping a secret, but in this instance, the obligation is legally enforceable. Often included in employment agreements, NDAs are similarly used when two companies are considering whether to do business together and need more information in order to make that decision. This allows the sharing of private material or knowledge while controlling access by third parties as well as prevents the information from being used beyond specified purposes.
NDAs can cover just about any type of information that is not generally known, such as trade secrets, client lists, marketing plans, product schematics, test results, and passwords. Each NDA is unique to the parties and their situation, but can be classified into two main types: unilateral or bilateral. Most NDAs are the first kind – one-way agreements where one party discloses information to a second party that it needs to remain secret. A potential employee who must agree not to disclose certain information as a condition of hire is a common example of a unilateral NDA. A bilateral NDA occurs when both parties mutually agree not to share each other’s private information.
To be legally binding, a nondisclosure agreement must include effective dates. The start date is often the date of signing, but the end date can be a specific day, a specific amount of time, a time tied to an event (such as the completion of a project), or indefinitely. It must also describe exactly what must be kept confidential. For maximum coverage, general phrases or terms should not be used. Specificity makes it easier to recognize a breach if one occurs. A violator can be sued for damages, forced to pay back lost profits, even held in contempt (which can lead to criminal charges).
Sometimes referred to as a non-compete clause or a covenant not to compete, a noncompete agreement can be a pre-condition of a business relationship or can be entered into at the end of one. Its main purpose is to lessen the possibility that confidential or sensitive information learned by a partner or employee will be unfairly used later on to gain competitive advantage over a business. Such an agreement is most commonly used to prevent former employees from starting businesses in direct competition with their former employers or working for direct competitors of their former employers.
Once reserved for high-level executives who had access to trade secrets, noncompete agreements are now popular among a wide range of industries and all levels of employees. Workers who breach an agreement can face a legal injunction preventing them from joining the company that wants to hire them or can be sued for damages if they solicit the protected company’s clients or share the protected company’s sensitive information.
To be enforceable, a noncompetition agreement should have provisions addressing the start date and the duration. The time period prohibiting the noncompeting party from working as or for a competitor must be reasonable under the circumstances. Another provision that must be reasonable concerns geographical limitations. A noncompete agreement can specify a state or distance from a city or distance from a detailed location, but it must be reasonably limited to a legitimate business interest deserving protection. The noncompeting party must be paid consideration (compensation) for signing the noncompete agreement. Typically, a new employee receives the job offer as consideration while an existing employee receives a financial payment (though in some instances, ongoing employment may be sufficient consideration).
We Can Help
Having experienced business attorneys draft your documents can help you avoid or minimize any potential disputes that could derail the success of your business. At Bunch & Brock, our Lexington, KY-based non-disclosure agreement attorneys understand the needs of individual business owners, and we have the necessary skills to be able to help them through potentially challenging employment and proprietary issues. We have decades of experience in successfully navigating the various stages of business development, and we can help you. To schedule an initial consultation, please call 859-254-5522 or fill out this online form.