If you’re hiring employees who will have access to confidential company information, you can protect that information by having those employees sign a Pennsylvania non-disclosure agreement (NDA). NDAs can prohibit employees from disclosing certain confidential information that the employees learn or have access to during the course of their employment. These non-disclosure obligations can be in a broad employment contract, or in a separate NDA.
When you have employees working in Pennsylvania, your agreements with them need to comply with Pennsylvania employment law. There are several best practices which will ensure your Pennsylvania NDA is enforceable, and will keep your confidential information private.
Here’s what you need to know about Pennsylvania NDAs.
Who can use a Pennsylvania non-disclosure agreement?
Employee NDAs are generally legal in Pennsylvania, but there are certain limits and obligations employers need to be aware of. The best practices below will help ensure that your NDAs are enforceable and more likely to hold up if challenged.
What are the best practices for drafting a non-disclosure agreement in Pennsylvania?
To draft a strong Pennsylvania NDA, follow these best practices:
- Make sure you are protecting a legitimate business interest. Non-disclosure agreements generally need to support a legitimate business purpose. Typically, this is protecting trade secrets, confidential information, or proprietary information. Asking every employee to sign a NDA may not be appropriate. For example, if you ask a low-level employee with no access to company secrets to sign an NDA, there may be no legitimate purpose to support the agreement. Limit your NDAs to only those employees with access to confidential company information.
- In Pennsylvania, the confidentiality obligations are finite. Pennsylvania NDAs should cover a finite period of time. For example, you might ask your employee to keep company information private during the course of their employment and for a year afterward. Provide exceptions for information that 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 a clear, legalese–free definition of the information to be protected. This ensures that your employees know exactly what they’re prohibited from sharing, and what does not fall under the agreement.
- 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. All of your employee NDAs or other contracts with non-disclosure obligations must include this notice.
- Include important exceptions to your definition of confidential information. Make sure your definition is not so broad that it would encompass information that is not actually confidential. Common exceptions include information that is publicly known or available at the time of disclosure, information that becomes publicly known or available after disclosure, and information that is already in the employee’s possession without confidentiality obligations at the time of disclosure.
- Consider excluding information related to unlawful employment practices from the definition of confidential information. Although Pennsylvania does not yet have a law to this effect, there are three bills in the state legislature, any of which may be passed into law soon, and which may further limit employers’ use of NDAs. There is an increasing trend at both the state and federal levels to render unlawful NDAs which prohibit employees from disclosing unlawful employment practices, such as discrimination or harassment. Stay ahead of the curve and promote a positive, inclusive company culture by including this exception.
Discover SixFifty’s Pennsylvania NDA solutions
Staying on top of Pennsylvania’s employment laws can be time-consuming and expensive, especially if you’re hiring employees in more than one state. However, getting your NDAs and other employment agreements right is important. When your non-disclosure obligations fail to comply with Pennsylvania state law, they may be unenforceable if challenged. That needlessly puts your company at risk.
Enforceable NDAs require careful thought and knowledge of both state and federal NDA legal developments. Instead of asking your in-house legal team or outside counsel to draft a Pennsylvania NDA, SixFifty can do the hard work for you.
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