In recent years, non-disclosure agreements have reached the front page of many news organizations. These cases usually involve high-profile companies and public figures that might use NDAs for dubious purposes.
In some situations, the NDAs have unreasonable characteristics that make them hard to uphold in a court of law.
Vague or overly broad language
Information from Forbes suggests that vague NDA language can make it hard to enforce and could invalidate the entire contract. Companies should strive for a certain level of specificity when making demands upon what information belongs in the confidential realm. Vague statements can backfire and void the NDA.
Overly broad language also can reduce the effectiveness of an NDA. Courts have a history of invalidating NDAs that contain overly expansive language or that try to cover non-confidential information. In situations where the information becomes public knowledge, the NDA no longer has validity.
Bad faith motives
In the right circumstances, NDAs make a lot of sense and protect the interests of a company. They serve the legitimate purpose of safeguarding the proprietary assets of a business. However, they should not seek to perpetuate practices that ignore business ethics or that fail to comply with state and federal labor laws. For example, NDAs that seek to hide sexual harassment actions will likely face trouble in the courts.
An imbalance of power between the company and the employee could also indicate a flawed NDA. A company that bullies employees into signing an NDA could indicate bad faith motives that make the agreement unenforceable. Both companies and employees should seek legal advice when dealing with NDAs.
