As more business owners strive to protect their interests and investment in intellectual property, Florida nondisclosure agreements are becoming more common in the corporate world.
Computer programs, code, trade secrets, customer information, and related assets have value, so it’s important to keep them out of the hands of your competitors.
However, state law on restraints of trade does include some important requirements to ensure these agreements are enforceable. A Florida contract attorney can describe how the statute works, but you can read on for some general information about nondisclosure agreements.
Overview of Nondisclosure Agreements
Also known as a confidentiality agreement in Florida, a nondisclosure agreement is a contract between two or more parties that prohibits the release of information. These clauses come in two forms:
- Unilateral: Only one of the parties is required to keep the information confidential, often in the context of an employee-employer relationship.
- Mutual: All parties are prohibited from making disclosures, which may be useful between multiple business partners, vendors, and related parties.
There’s a wide range of information that can be subject to confidentiality agreements, including:
- Company research and development data;
- Software and computer programs;
- Marketing strategies;
- Trademarks, patents, and product prototypes;
- Customer and client details; and,
- Many other forms of intellectual property.
Special Considerations on Florida Confidentiality Agreements
A nondisclosure clause is considered a restraint on free trade, so there are some ramifications that are different from other types of contracts. You need to keep in mind that:
- By law, a nondisclosure contract must be reasonable and necessary for protecting a legitimate business interest. It must also be limited in scope and duration, in terms of timing, geography, and other relevant factors.
- While not required, you should put any confidentiality agreement in writing. When you have a physical document, you can establish the fairness of the arrangement, along with other key terms and conditions.
- A written nondisclosure is also effective in clarifying what information is to be kept confidential. Using a blanket statement instead of specific definitions may increase the likelihood that an agreement will not be enforceable, as described below.
- Your confidentiality agreement must be supported by consideration, an essential element of any contract. The term refers to the exchange of something of value, which might be getting hired in the employment context. Alternatively, when signing a nondisclosure agreement is part of an employee’s exit strategy, the item of value could be a severance package.
Enforcing Florida Nondisclosure Agreements
As a business owner, you know that the implications for a breach of a confidentiality clause can devastate your company. Your competitors, associated businesses, and a disgruntled employee can destroy what you’ve tried diligently to protect. Fortunately, you do have options under Florida law.
A Lawsuit for Monetary Damages: Because it’s rooted in contract law, you can sue for breach if someone violates a nondisclosure agreement. You can seek compensation for all losses resulting from the violation of the
An Action for Equitable Relief:In many cases involved a breach of confidentiality, it’s possible to sue in equity, where you request that the court take certain actions instead of awarding monetary damages. You can ask a judge to issue a protective order enjoining the offending party from continuing with the offensive conduct.
Keep in mind that your success with legal action depends, in part, on how well you’ve structured the nondisclosure agreement at issue. It must comply with all legal requirements, especially the reasonableness standard and issues regarding your legitimate business interests.
A court may refuse to enforce a clause that’s not in strict compliance and only serves to limit the other party, instead of providing protection to your company.
Other Types of Restrictive Covenants
As you’re considering nondisclosure agreements, there are some other related contracts you may want to review. For example, you may choose to implement such restrictive covenants as:
Nonsolicitationagreement, which prohibits current and former employees from steering awayyour existing workers, clients, and customers into a related business opportunity; and,
- Noncompete agreements, a way to prevent departing employees from working for a competitor or opening up their own shop for a designated amount of time after their exit.
“It’s important for folks to understand that Non-Disclosure Agreements are incredibly useful, but they have limits. They’re not the same as non-competition agreements, for instance. Just because a person agrees that he or she will not disclosure your valuable business idea, that might not mean the he or she won’t use the idea himself of herself.”Michael Long
Talk to an Orlando, FL Contract Lawyer About Your Options
As you can see, restrictive covenants are more complicated than some of the contracts you may deal with on a regular basis. For more information on nondisclosure agreements in Florida, please contact Brewer Long Business Law to set up a no-cost consultation. You can reach our office by calling 407.660.2964 or filling out our online contact form.
Our experienced contract attorneys represent business clients throughout Central Florida, including Orlando, Sanford, and Winter Park. We can explain the relevant legal issues in more detail after reviewing your situation.