Protecting confidential company information is important. When your employees will have access to trade secrets, confidential information, or proprietary information, you can protect it by having them sign a Illinois non-disclosure agreement (NDA). NDAs can prohibit employees from disclosing specific confidential information that the employees learn or have access to during their employment. These non-disclosure obligations can be outlined in a standalone NDA or in a broad employment contract.
When you have employees in Illinois, the agreements with those workers must comply with Illinois employment law. There are a few best practices you can follow to ensure your Illinois NDA will protect your confidential information and hold up if challenged.
Here’s what to know about Illinois NDAs.
Who can use an Illinois non-disclosure agreement?
NDAs with employees are generally legal in Illinois. However, there are certain limits employers need to be aware of, and several best practices that will help ensure your agreement is immune from challenge in court.
What are the best practices for drafting a non-disclosure agreement in Illinois?
To draft an enforceable Illinois NDA, consider following these best practices:
- Make sure you are protecting a legitimate business interest. Non-disclosure agreements typically need to be supported by a legitimate business interest, or they will not be enforceable. Protecting trade secrets, confidential information, and proprietary information is considered a legitimate purpose. For example, if you ask a low-level employee who has no access to confidential company information to sign an NDA, there may be no legitimate business purpose supporting that NDA. It’s wise to limit NDAs to only employees who have access to your confidential information.
- In Illinois, the confidentiality obligations are finite. Your NDA may not continue indefinitely. To ensure your agreement is enforceable, add a reasonable time limit to the confidentiality obligation. This is typically “during the course of employment” or for a short time period thereafter. Your agreement should also provide an exception for any information that later becomes non-confidential. Typically, a longer duration is appropriate for information that qualifies as a trade secret.
- Define your confidential information. The agreement should include a clear, legalese–free description of the information to be protected. Making the description easy to understand ensures the employees know exactly what they are prohibited from disclosing.
- Include notice required by federal law. The Defend Trade Secrets Act of 2016 requires notice regarding immunity from liability for limited disclosures of trade secrets. Your employee NDA or other contracts containing non-disclosure obligations need to include this notice.
- Include important exceptions to your definition of confidential information. It’s important that your definition of confidential information isn’t so broad that it includes non-confidential information. For example, common exceptions include information that becomes publicly known or available before disclosure or during the tenure of the agreement, as well as information that is already in the employee’s possession, without confidentiality obligations.
- Exclude information related to unlawful employment practices from the definition of confidential information. There is a trend across the country, both at the state and federal levels, to make NDAs that prohibit employees from disclosing unlawful employment practices unenforceable. This includes issues like harassment and discrimination. Illinois law generally prohibits employers from requiring employees to sign NDAs that limit disclosure of unlawful employment practices
Discover SixFifty’s Illinois NDA solutions
Keeping up with Illinois’ employment laws can be time-consuming and expensive, especially if you’re hiring employees in more than one state. However, ensuring your NDAs and employment agreements are enforceable is important. When your non-disclosure obligations fail to comply with Illinois state law, they might be unenforceable. This needlessly puts your company at risk. Instead of asking your in-house legal team to create an NDA, or seeking outside counsel, SixFifty can do the hard work for you.
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