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By: Pile Law Firm, PLLC

Are Non-Disclosure Agreements Legal in Pennsylvania?

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You might have a new job out of college or have been working for the same company for years, and now you’re offered a significant position with a large corporation. However, you are now presented with an employment contract that includes various possibly limiting clauses, such as a non-disclosure agreement. You must sign these documents as a condition of your employment and may feel that you have no choice in the matter, but that may not be the case.

Non-disclosure agreements usually offer you employment with specific conditions that require you to agree not to disclose trade secrets or other confidential or proprietary information learned  during employment. These clauses protect your current employer and their business interests but may significantly limit future opportunities and job choices.

Also, many non-disclosure agreements go even further, prohibiting you from saying anything that casts a negative light on your employer and restricting your ability to use the knowledge you acquired during your employment for a new employer (even if you discovered or developed this knowledge).

So, any non-disclosure agreement must balance your right to change jobs and an employer’s right to protect their business.

You should consider carefully before signing a document that may affect your freedom to change jobs, continue working in the same field, or to start your own business.

Non-disclosure agreements are legal in Pennsylvania but cannot be tilted too far towards protecting your employer, thus possibly violating your rights in the process.

So, if you signed (or are asked to sign) a non-disclosure agreement (or NDA), then violating this agreement may have serious consequences!

NDAs are commonly considered legally binding contracts once signed. However, whether to sign it is a more complex question than it may seem.  

Before signing any business contract, which may include an NDA or other limiting clauses, obtain the advice and guidance of a professional and knowledgeable Blue Bell business lawyer and ensure that you are not entering into a contract that may severely limit you and your family’s future.

Why Does Your Employer Want You To Sign a Non-Disclosure Agreement

It’s clear, from a legal point of view, that non-disclosure agreements can be effective in protecting the trade secrets and other confidential information of your employer; however, what benefits does it supply your employer with?

  • First, it may establish employee expectations – If an NDA clearly outlines the specific business information that is protected and the penalties that you may incur if you violate the NDA, then you know from day one the importance of protecting your employers’ trade secrets.
  • It helps protect trade secrets when information must be shared – The goal of an NDA is to prevent you from sharing confidential information in the first place. NDA’s can help protect trade secrets if the information is transmitted during daily business. You may need to disclose some trade secrets to vendors or third parties. However, if the third party signs an NDA, your employer’s trade secrets will still be protected.
  • An NDA provides the employer legal recourse – If you disclose a company trade secret, your employer may usually file a misappropriation claim under Pennsylvania law. So, if you signed an NDA, your employer could pursue legal remedies under the agreement; often, pursuing a breach of NDA is more straightforward for your employer than a trade secret misappropriation claim.

You begin to see that any NDA you sign is usually designed to protect your employer, not you, or your rights to future employment. By consulting and getting the advice of an experienced local Blue Bell business lawyer, you can effectively design possible changes to the NDA and protect your rights as well.

If I Must Sign a Non-Disclosure Agreement, Is It Enforceable in Pennsylvania?

It depends. Specific provisions could be challenged in the Pennsylvania courts depending on how the non-disclosure agreement is written.

Commonly though, in Pennsylvania, non-disclosure and related documents such as non-compete and non-solicitation agreements are enforceable if they adhere to the following:

>> If they are included in an employment contract or employment relationship.

>> If they are supported by adequate consideration.

>> If they outline reasonably necessary restrictions to protect the employer’s legitimate business interests.

>>If the nature of these “restrictions” that are imposed are properly limited in duration and geographic location.

You must note that you also have rights. So, if you are about to sign or have signed an NDA, the advice and guidance of a local experienced business law team will be invaluable in protecting your rights under Pennsylvania laws.

Under What Situations May My NDA Be Unenforceable in Pennsylvania?

Always note that your situation is unique for the NDA you sign. There are instances in which the courts may determine that your NDA is unenforceable.

Some examples of why this might happen are:

  • The NDA verbiage needs to be narrower – If your NDA is overly broad or restrictive, then a court may find issues with it, mainly if it’s not limited sufficiently in scope or duration.
  • The information referred to is not confidential – It’s undoubtedly going to be much harder for your employer to convince a court to uphold your NDA  if the information referred to has already been widely disclosed or is public knowledge.
  • The NDA (or agreement referred to) is requesting you do something illegal – Such as your employer instructing you to withhold facts that the employee has a legal duty to report.

These are only a few examples, but you must note that your employer has lawyers protecting their rights, and you need to have an aggressive, experienced business lawyer defending yours!

NDAs and other limiting contractual documents must be reviewed from your perspective, so they don’t hinder your future earning potential or your rights.

I Must Sign a Non-Disclosure Agreement; How Should I Proceed?

You need to note that your new or current employer has lawyers fighting for their interests. So, you must also have an aggressive, professional, and winning legal counsel protecting your rights and interests. Therefore, it’s never wise to attempt to dissect or fight any NDA on your own.

Your local Blue Bell business lawyer has thorough and detailed knowledge of how these business matters are legally managed in your geographical area.

Your aggressive business law team, fighting on your behalf, will use this local knowledge to your advantage when presenting and fighting your case. Consult with your lawyer before you sign, or if you have an issue after you do, and protect your and your family’s livelihood, as your future and income may depend on it.