When it comes to commercial litigation, one of the most important factors that dictate what is an NDA and what is not, is the nature of the business. Simply put, a Non-Disclosure Agreement, also referred to as a confidential disclosure agreement, confidential information agreement, non-compete agreement or secrecy agreement is a legally binding contract or component of a business deal. A typical NDA will restrict the distribution of the information disclosed by the parties involved in a transaction. The key issue when determining if an NDA is needed is whether the client or competitor is prevented from reasonably foreseeing an effect of their disclosure. In other words, the restriction in the agreement restricts the disclosed information from being used in competition with, or for advertising or for similar purposes to those of the client or competitor.
A major reason to seek legal counsel in what is an NDA situation is that in many cases litigants are subject to what is an implied or express guarantee of damages. For example, in a commercial lawsuit, a plaintiff may be able to introduce into evidence the fact that his competitor committed fraud or engaged in sexual harassment. However, if he fails to obtain a protective non-disclosure agreement (NDA), he may be unable to introduce such proof. Moreover, a party may be subject to what is an implied or express guarantee of damages if, in the course of the litigation, he discloses information that is harmful to the competitors or the company. As illustrated, a litigant who is engaged in what is an NDA will not be able to prevent his competitors, clients or competitors from reasonably foreseeing negative consequences, in this case, sexual harassment.
Another example of what is an NDA is a proposed loan modification. Under a lender’s loan modification program, the mortgage holder is often required to submit a letter of authorization granting the lender authority to condition continuing payments to the mortgage on the completion of the loan modification. The lending party, in turn, must inform the borrower in writing that the loan modification will result in the borrower’s loan repayments being subject to what is an NDA. In this instance, the lender may also include a proposed repayment schedule based on the amount of NDA imposed on the borrower. In other words, when the borrower is informed that he is subject to what is an NDA, the borrower is required to undertake affirmative steps to avoid what is called a “new tax” – that is, any additional payment that would result from a determination that the borrower owes more than is actually paid by the borrower.
In many cases, what is an NDA document are closely associated. However, they are often used in different parts of the law – sometimes with devastating results. For example, an individual may be sufficiently confident that he will not receive a promotion or retain certain employment opportunities after completing an NDA. To avoid what is often referred to as a “new tax,” the individual must negotiate a new repayment plan with the lender. The reality is that a borrower can be forced to repay the lender money under what is often called a “new tax” if he does not agree to a new repayment plan.
Another frequently used term within the field of intellectual property law is what is known as a non-disclosure agreement (NDA). A typical NDA requires that the borrower never disclose any of his/her work secrets to anyone else; this includes what is learned during a trade secret negotiating process. Such agreements often result in harsh penalties for the individual who disclosed confidential information. For example, a United States patent examiner could issue a patent infringement suit against a non-licensed contractor if the contractor refused to disclose the source code for a program in order to obtain a United States patent.
Nondisparagement clauses are also frequently used in what is termed a non-traditional legal system such as the employment relationships in the workplace. Employment relationships often include what is known as a “hiring spree.” This refers to a process where an employee receives numerous bonus awards for a superior performance record. However, these bonuses are often subject to what is referred to as an “employment growth strategy.” In other words, an employee may receive bonus incentives for meeting sales targets that were related to the performance of the business in which he worked.
Similarly, a sexual harassment suit may result from what is termed a “nondisparagement clause.” In the matter of sexual harassment, an employee may be subjected to what is called a “non-disparagement clause.” For example, in the matter of an employment sexual harassment case, an employee may be subjected to what is referred to as a “sexual favors clause.” In the matter of what is called a “non-disparagement clause,” if an employee discloses or attempts to disclose a trade secret or a confidential work product to a third party that is not entitled to that information, that employee could be subjected to defamation or breach of contract suit. Both of these are examples of statutes that have been cited in the past by cases that have tried to bring sexual harassment and/or a non-disparagement or non-competition lawsuit under the act.
While the above is based upon what is often used as a rationale for a California NDA, the fact is that it is often used as a way to limit and prohibit otherwise lawful conduct in the workplace. Additionally, the fact is that many times the basis for a California NDA lawsuit is related to what is often called a “workplace sexual harassment” lawsuit. In other words, in the matter of what is often used as a rationale for a California NDA lawsuit, the fact is that it can be a basis for a lawsuit related to what is often called a “workplace sexual harassment” lawsuit.