What happens when an NDA is broken?

Non-disclosure agreements (NDAs) are contracts that prohibit employees from disclosing certain information about their place of work. These agreements are often put in place to protect essential trade secrets and other intellectual property. They can also include disparagement clauses, which entail legal reprisal if a former employee badmouths his or her former boss.

Not all NDAs are considered enforceable in the eyes of the court. For example, employers are not permitted to prevent employees from talking about wrongdoing in the workplace or any crimes committed. In this case, an employee can request that the court throw out the NDA for its lack of validity. Doing so would allow a person to go against the terms of the agreement without fear of reprisal, such as when reporting a workplace for violations that endanger workers.

When NDAs are breached, the person disclosing information may be subject to a number of punishments and penalties. Punishments can include terminated employment if the person is still working for the employer. A person may also be fined for their disclosure, and this sum of money is usually agreed upon in the original NDA. A lawsuit may also result from the breach, depending on its nature.

When an NDA is linked to a settlement, such as money provided after a work injury or other issue, breaking the contract could result in an employee being asked to return the full sum of the settlement. Workers may also be asked to pay liquidated damages for each separate breach, which can become quite expensive depending on how many breaches are cited within a given case. If you believe a current or former worker has breached your company’s NDA, the next step is to contact an attorney with experience in this area of the law.