What is a Non-Disclosure Agreement?

In the U.S., a non-disclosure agreement is a separate document or a clause included within another employment agreement, such as a separation or non-compete agreement. (Non-disclosure agreements often go hand-in-hand with non-compete agreements.) Other names for it include nondisclosure agreement, NDA, trade-secrets agreement and confidentiality agreement.

Regardless of what your employer chooses to call their non-disclosure agreement, it's a contract that typically includes at least the following, general conditions.

• You cannot disclose or profit (monetarily or otherwise) from company confidential information, trade secrets or customer lists.
• Anything you invent, discover or improve belongs to the company if it's related to the existing or planned scope of the company's business in any way.

A trade secret is a formula, process, device or any information that is not published, divulged or otherwise generally known, and gives a business a competitive advantage.

Your employer might ask you to sign a non-disclosure agreement when you hire in, resign or get laid off, during your employment, or all of the above. But your employer can't rightfully ask you to sign without a legitimate business reason.

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