The workplace environment has changed over the last few years and many small and mid-size businesses now rely on outside help – independent contractors or freelancers who perform important rolls but who are not employees on the payroll, or even third party companies who consult on specific projects.
While companies that utilize outside resources can have access to rock star talent without having to increase headcount, there can be pitfalls to this approach in terms of properly protecting the business’ secrets. In many cases, companies are using a standard non-disclosure agreement, but you can craft one that is smarter.
Here are our top four tips when you are getting ready to create a non-disclosure agreement:
Make sure you own what you want to protect. Rarely do new ideas spring forth in a vacuum. Founders of new companies need to review any non-disclosure agreements they may have signed with former employers to make sure any ideas brought to the new venture cannot be claimed by someone else from the employment past.
Protect it before sharing it. We know you can’t wait to share about what you’re up to. While it is tempting to bounce ideas off friends or colleagues outside the company, doing that can cause you to lose ownership of that idea if it is stolen before you’ve made a reasonable effort to protect it. Having your non-disclosure agreement in place before you bring others into the fold can show this effort was made.
Be specific. Your non-disclosure agreement should include specific terms relating to the confidential information, the obligations of those signing it, any exclusion from confidential information, the specific time period that the agreement covers, and enforcement provisions like which state’s laws will govern the agreement and an attorney’s fee provision if the agreement is breached.
Get professional help. While there are a number of non-disclosure agreement forms out on the web, those boilerplate agreements will not necessarily provide the proper protections for your specific needs. Consult with an attorney to draft customized non-disclosure agreements for your company to cover employees, contractors and mutual relationships. When they are tailored to fit your business, they are much more likely to be enforceable in court, which is the whole point to begin with.
If you are interested in learning more about business protection strategies, call us today at (612) 206-3701 or fill out our contact form to schedule a small business consultation session.
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