For example, Susan signs an NDA at her new job. The NDA says she can’t reveal anything about her company to anyone else. This NDA is probably too vague to be legal.
Mary is neighbors with a famous politician, who is going through a brutal divorce. Mary overhears screaming fights and sees the police stop by more than once. She promises her neighbor that she won’t say anything. Mary’s promise is not a binding contract because she didn’t receive anything of value from her neighbor. Alternatively, if Mary’s neighbor paid her to be quiet, then she received a benefit (the money) for the detriment of keeping the secret. In this case, both parties gave consideration.
For example, Tyler is told that he’ll be given work if he signs the NDA. However, he is given no work in exchange, so he might be able to cancel the NDA for misrepresentation.
For example, Susan’s corporate employer gives her an NDA that prevents her from disclosing or using confidential information forever. This type of perpetual NDA is likely illegal. [5] X Research source However, if the confidential information is a trade secret, then a court might uphold the duty not to disclose it.
For example, Mike goes to work for Acme Networking Systems. They require that he sign an NDA not to disclose or use any of their confidential information for 10 years. After five years, Mike’s contract ends and he wants a new job in the IT industry. However, the company is trying to use the NDA to prevent him from finding work in the industry. In this situation, Mike might argue that the company is being anti-competitive by preventing him from getting another job. An NDA is not the same as a non-competition covenant. An NDA can ask you not to disclose information, but it cannot enforce this restriction by preventing you from taking another job. If you believe that your employer is trying to use your NDA to prevent you from getting another job in the industry, you can take it to court.
For example, Acme Networking Systems and Omega Fiber Optics enter into a mutual NDA. Each side agrees to disclose confidential information to each other and to safeguard it. However, Omega turns around and discloses Acme’s confidential information to a third party. In this situation, Omega has breached the agreement and Acme can get out of the NDA.
Get a referral by contacting your nearest bar association. Call up the lawyer and schedule a consultation. Talk about what you should do if the NDA is illegal. For example, you might go ahead and break it, but you’ll be inviting a lawsuit in turn. Discuss your options with your lawyer so you can make an informed decision.
If you think the NDA is not legally enforceable, you can also ask the other side to let you out early for that reason. However, you can expect the other side to push back, since they probably don’t think they used an illegal contract. Check whether the NDA is about to expire. If it is, you can probably sit tight and not do anything.
For example, it might read, “Either party may terminate this nondisclosure agreement by providing written notice to the other party. After termination, the Receiving Party’s obligations to the Disclosing Party are limited to the Confidential Information disclosed before termination was received. ”[8] X Research source In this example, you must maintain the confidentiality of previously-disclosed information until the NDA expires. Each early termination clause is a little different, so show it to your lawyer so you understand it fully.
If you think the NDA is not enforceable, you should explain your reasoning. However, your lawyer should probably draft this section or at least review it. Realize that the other side doesn’t have to agree to let you out of a valid NDA, and they might disagree with you whether the NDA is unenforceable.
A valid rescission agreement should identify the NDA by date and explicitly state that parties mutually agree to rescind the original agreement. [9] X Research source Keep a copy of the signed agreement with your records.
The person who files the lawsuit is the “plaintiff,” and they should identify clearly what confidential information you disclosed or used. They should state sufficient facts to support their allegation.
The information you revealed isn’t confidential. Read the NDA and check whether the information fairly falls within the definition of “confidential information. ” You were allowed to use or disclose the information. Many NDAs allow you to disclose to third-party vendors in some situations. Read your NDA to see if the situation is covered. You didn’t use or disclose any information. Someone else might have disclosed the information.
For example, if you think the NDA is anti-competitive, then all you need is a copy of the NDA. If the other side made misrepresentations, you should document them. Write down your own memories of any conversation you had with the other side and look for email communications. Another popular defense is to argue that the other side made the confidential information publicly available. [11] X Research source Gather documentation. For example, a company president might have disclosed information when giving an interview to a trade publication.
In an answer, you admit or deny each allegation. If you don’t have sufficient information, you can also refuse to admit or deny. You should also raise any defenses that you have (e. g. , why the NDA is illegal). If you don’t raise your defenses in the answer, you can’t raise them later. In a motion to dismiss, you ask the judge to throw out the case because the complaint is defective in some way. For example, you can argue the plaintiff filed the lawsuit in the wrong court. [13] X Research source
Discovery. This is the fact-finding phase. You can request documents from the other side, or give them questions to answer under oath. You might also participate in a deposition, where you answer question in person. Summary judgment motion. After discovery, either side might seek summary judgment. You ask the judge to decide in your favor because no set of facts can support the other side. [14] X Research source Settlement. You can settle at any point in the lawsuit. In fact, settlement negotiations might be ongoing right up until a jury announces the verdict. Trial. Your lawyer will identify your witnesses and serve them with subpoenas. Ideally, your lawyer should also prep you for your testimony. You can have a trial before either a judge or jury.
