Ever heard of non-disclosure agreements? Perhaps, you have heard them referred to as confidentiality agreements, or a similar term. In either case, how familiar are you with them?
Are you aware that if you are in a specific business, a non-disclosure agreement can spell the difference between the proverbial life and death of your business, particularly if your business has employees, contractors or interns?
So, what are non-disclosure agreements?
Non-disclosure agreements are defined as contracts that restrict the disclosure of confidential information or proprietary knowledge under specific circumstances. In other words, a prospective employee or partner agreements to not disclose certain internal trade secrets in exchange for compensation or other benefits received.
Generally, the term requires a non-disclosure period to cover the time of employment or partnership, with the inclusion of an additional one to five years after the employee's termination, retirement, or a partnership resolution.
My opinion is that there are some levels within most businesses that should incorporate some form of non-disclosure agreement, although most businesses do not do so. This is especially true, whereby, internal creativity is the proverbial life source of the company.
Examples of businesses requiring non-disclosure agreements range from engineering firms to restaurants. And, speaking of restaurants specifically, allow me to iterate on two personal experiences.
One acquaintance of mine, who owns a small Mexican food court that is very popular for its unique taste in our area, experienced something of a negative impact of not having a non-disclosure agreement.
After working for him only a few years, one of his employees informed him that she would be leaving in order to take some much needed rest and time off.
However, after only a few weeks, he learned that she had opened a similar food court on the opposite side of town. Fortunately for him, he has a solid clientele from his years of operation combined with high quality food.
However, having a non-disclosure agreement would have ensured that this new competition, as slowly as it may be, would not exist without some degree of legal repercussion and / or financial obligation on her behalf.
Another acquaintance recently opened a bakery and deli, with 100% of her items being homemade. Naturally, this particular food eatery carries a special sentiment with its clients since much of our food that is purchased today is manufactured, frozen, then simply re-heated.
I advised her that since her food items are homemade, and that her cooks are required to have access to and learn her recipes, she should immediately require each employee to sign a non-disclosure agreement.
And, as a result of her doing so, fortunately, she will not suffer the same fate as my other acquaintance in competition.
Incorporating non-disclosure agreements is not so much about trust, or the lack of, as it is about protecting your business and its related assets. So, as a vested owner or partner, you should not feel any degree of guilt for their inclusion.
For more information on non-disclosure agreements, simply type the phrase, "non-disclosure agreements," into the Google.com search engine.