Non-disclosure agreements (NDAs) and non-compete agreements are both legal documents business owners can employ to protect their rights and proprietary information as well as limit what an employee or business partner can say or do under certain situations.
These two types of agreements may be essential to a business, which is why it’s important to understand the difference between them and when it may be appropriate to use one or both.
What is a non-disclosure agreement?
The primary purpose of a NDA is to prevent an employee or contractor from revealing proprietary or confidential information to a third party or competitor. This confidential information may include client lists, intellectual property, trade secrets, strategy documents, and other business information.
Often (but not always) it is a mutual agreement put in place to keep private information private. In the agreement, a company would ask their employee not to share confidential information they acquired during their contractual relationship with the company, and it would also contain provisions for what would happen if an employee were to breach the agreement.
What is a non-compete agreement?
Non-competes are generally very specific and designed to protect against unfair competition. The details of the agreement may prohibit an employee from working for another business in the same industry and geographic location for a specified period of time after leaving the company. This includes a former employee starting their own business that would be in direct competition with them.
Non-compete agreements may be separate contracts signed by an employee or included as part of an employee agreement. Florida has very specific requirements when it comes to non-competes, so if you are considering using one, please contact us for help.
While both NDAs and non-competes may be useful for your business, they are used for different purposes. A NDA is often broad in scope and used to protect private information. Non-competes are highly specific and intended to protect a business from unfair competition.
To learn more about these agreements and how they can be used to protect your Florida business, get in touch with our commercial law team at Silverberg|Brito, PLLC.