Question

Are most people that sign a nondisclosure agreement or a confidentiality agreement clear about what it means? Are nondisclosure or confidentiality agreements usually reasonable or unreasonable and why?

Answer 1

I don't think that all of those signing the non disclosure and confidentiality agreement are clear about what it means. This is particularly true about the new hires or entry level employees who are more concerned about getting the job than being bothered about any agrreements that they might have to sign. The reason is low bargaining position or unawareness. Senior level employees know it more and like to evaluate its relevance to their case.

The non disclosure as well as confidentiality agreements are most relevant while the employe is in a key role where he /she knows many trade secrets, recipes, or is in charge of or has access to confidential business information, which, if shared with outside world, or competitors might cause huge financial / non financial losses or serious business consequences. Still, such agreements are reasonable for specific period of time after a person has left the job, or applicable to a specific geography, where the application or use of such information might pose business challenges for the company. Binding someone for life can never be reasonable because a person should be allowed to use the tricks of the trade he /she learnt while in company for his /her own professional growth, though not as soon as he /she leaves. I don't advocate leaking of vital information, but one must be allowed to use the general trade skills for future growth. Similarly, the person's geographic location must also be considered while making such agreements. For example, a person might harm a chinese restaurant from where he learnt some new recipes, of he decides to open a somilar restaurant 2 miles away, but there is no harm if he does so in a neighbouring city 50 miles away, as this move will hardly affect the business of the restaurant in question.