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What happens if you break a nondisclosure agreement?

An NDA is a legal contract that outlines sensitive information that involved parties shouldn’t share, but what happens when someone breaks the agreement?

What happens if you break a nondisclosure agreement?
What happens if you break a nondisclosure agreement?

Nondisclosure agreements (NDAs) protect sensitive information from getting shared with other parties, usually to safeguard trade secrets or critical company information. These agreements are legally binding, and while certain factors can nullify or invalidate an NDA, they cannot be legally broken otherwise without repercussion. The seriousness and severity of this beg the question, what would happen if one breaks a nondisclosure agreement?

What Qualifies As Breaking an NDA?

One of the most important things you should know before signing an NDA is what you can and can’t share and if there are any exceptions to the contract. There are times when you may need to share sensitive information, which should be clearly stipulated in the NDA. Anything outside of these special circumstances conflicts with the terms you agreed to and qualifies as a breach of contract. Unfortunately, even if you shared the information by accident, you can still get held accountable.

What Happens if You Break an NDA?

A formal investigation launched by the company will be the first thing to happen after a nondisclosure agreement gets broken. At first, the investigation will attempt to determine if the NDA was actually violated. If the investigation cannot find that any information got leaked or evidence that someone leaked the information, the case will have to get dropped.

The beginning stages of the investigation involve finding evidence of leaked information and checking if there are any exceptions in the contract. For example, if the NDA has expired, if there was criminal activity, or if the language is vague or irrational, the company may not be able to pursue legal action. However, if investigators determine the NDA was violated, they will then look for evidence of whom the information got leaked to and who leaked the information.

If investigators determine that one or more individuals are responsible for the breach, the next step is to assess the legal action that needs to get taken. The company will look at how serious the breach was, its impact and financial consequences, whether the violation was deliberate, and whether it is in their best interest to sue. Once the company has determined the legal action they wish to take, it will likely obtain legal counsel and bring the case to court to assess what occurred and find an appropriate resolution.

What Should I Do if I’ve Broken an NDA?

A company can choose to sue for monetary damages, other suffered losses, or enforce an injunction. Typically, if an employee does not have the means to pay for the monetary damages suffered, an injunction will prevent the employee from ever sharing information again. Either way, it is crucial to seek legal representation as soon as possible and speak to an employment law attorney. They will be able to fully prepare you for the court process and protect you from unnecessarily harsh ramifications. Sometimes, parties will seek to get the most out of an employee financially as an act of retaliation, so it’s best to seek legal representation to protect yourself.

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What happens if you break a nondisclosure agreement?