When you know your employees will have access to your company’s confidential information, you can protect that information by having an employee sign a North Carolina non-disclosure agreement (NDA). NDAs can prohibit employees from disclosing specific confidential information that they learn or have access to while they’re employed. Non-disclosure provisions can be included as part of a comprehensive employment contract, or in the form of a standalone NDA.
If you have employees located in North Carolina, those non-disclosure provisions need to comply with North Carolina employment law. To ensure your North Carolina NDA is enforceable and will protect your sensitive information, there are several best practices you should follow.
Here’s what you need to know about North Carolina NDAs.
Who can use a North Carolina non-disclosure agreement?
Generally, NDAs with employees are legal in North Carolina—but there are certain limitations employers should know about and abide by. Following the best practices below will make sure your agreement is more likely to hold up if challenged in court.
What are the best practices for drafting a non-disclosure agreement in North Carolina?
To draft a strong North Carolina NDA, make sure your agreement follows these guidelines:
- Make sure you are protecting a legitimate business interest. Enforceable non-disclosure agreements generally need to be supported by a legitimate business purpose. This is typically the protection of trade secrets or other confidential or proprietary information. Who signs the agreement matters: if you ask low-level employees who have no access to confidential information to sign an NDA, that may not be supported by a legitimate purpose. Limit your NDAs to employees who will have access to sensitive information.
- In North Carolina, the confidentiality obligations are finite. You cannot ask someone to keep information private indefinitely. A typical NDA might cover the period during employment and a short duration afterward. The agreement should provide an exception for information which later becomes non-confidential. Typically, a longer duration is appropriate for information that qualifies as a trade secret.
- Define your confidential information. Your agreement should include an easy-to-understand definition of the protected confidential information. Avoid using legalese. This way, your employees will know exactly what they’re 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 NDAs, and any other contracts containing employee non-disclosure provisions, should include this notice.
- Include important exceptions to your definition of confidential information. It’s important to ensure your definition of confidential information isn’t so broad that it would encompass non-confidential material, too. These exceptions should include information publicly known or available at the time of disclosure, information that becomes publicly known or available after disclosure, and information the employee already has access to without confidentiality obligations.
- Consider excluding information related to unlawful employment practices from the definition of confidential information. There is a growing trend across the country, at both the state and federal levels, to render unlawful non-disclosure provisions which prohibit employees from disclosing unlawful employment practices like discrimination or harassment. North Carolina does not yet require these exceptions, but you should consider including them to stay ahead of the curve and promote a positive, inclusive company culture.
Discover SixFifty’s North Carolina NDA solutions
Keeping up with North Carolina’s employment laws can be time-consuming and expensive, especially when you’re hiring employees in more than one state. However, ensuring your NDAs and other employment agreements are enforceable is important. If they don’t comply with North Carolina law, they may needlessly put the company at risk.
Creating an enforceable NDA requires knowledge of the latest developments in NDA law, both at the federal and state levels. Rather than asking your in-house legal team to draft an NDA, or seeking outside counsel, SixFifty will do the hard work for you.
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