What to Do If an NDA Has Been Breached

An NDA safeguards your company’s secrets. But what if a signer disregards it?

Accepting a nondisclosure agreement (NDA) entails more than just swearing confidentiality. It is a formal legal contract that imposes a privacy duty and obligates individuals who agree to keep any specified information top-secret or protected.

NDAs are quite prevalent in many commercial contexts since they are one of the most reliable methods to safeguard trade secrets and other private information. NDAs are routinely used to safeguard secrets such as product blueprints, customer information, sales and marketing strategy, or a unique manufacturing method.

In most circumstances, employing a nondisclosure agreement ensures that your secrets remain hidden. A breach of contract after a nondisclosure agreement has been made is a significant issue, and if you’ve suffered as a result of someone else’s loose lips, you have a few legal options.

Who leaked the information? After an NDA breach, how should you proceed?

There are a few things you may take to protect yourself if you discover an associate is violating a nondisclosure agreement or misappropriating information. In many circumstances, you may sue for the theft of your sensitive information or trade secrets.

Misappropriation is defined as the unlawful or illegal acquisition or disclosure of sensitive information, such as via theft, bribery, fraud, or even hacking. Here are several examples:

In return for trade secrets or dirty laundry about a rival, a competitive corporation gives an employee a better salary or a hefty bonus.
An employee provides private material to a blogger or reporter, who then distributes the information to the media.
A gadget prototype gets stolen from the house of a creator and ends up in the hands of a rival.
A skilled hacker breaches protected data and makes information public.

Several laws that protect trade secrets and sensitive company information are based on the Uniform Trade Secrets Act (UTSA), which establishes a set of precise principles concerning confidential information and trade secrets. Patterns, formulae, drawings, gadgets, programs and codes, processes and procedures are all examples of information protected by these rules. Customer lists are also considered trade secrets in several states and countries.

What should you do if an NDA is broken?

Assume you work in human resources for a huge corporation. You arrive at work one morning to find that a corporate server has been compromised, and you fear that files holding sensitive e-mails, client databases, and the code for a new computer software have been compromised. A contractor in information technology was just discharged on terrible terms, and you assume he is responsible for the breach. You are aware that the former employee signed an NDA, and you should consider the following actions:

Examine the original file. In many circumstances, the remedies for violation of contract are expressly stated in the contract. This also applies to nondisclosure agreements.

Look into the theft or breach. This is often the most challenging stage in pursuing a breach of NDA contract action. You know the information is public, but you’ll need actual proof to show how it got there. It is critical to get accurate information. If you are unable to establish your case, you may be held liable for any legal expenses incurred by both parties, according to stipulations in the USTA regulations and the NDA contract.

Consider searching for the mechanism of misappropriation (how the secret got out), how the private knowledge has been utilized, and the economic worth of the information while gathering information. It might be difficult to place a monetary value on facts, but it must be evaluated, particularly if you believe you are entitled to compensation.

Decide if a legal claim is required. In virtually all circumstances involving a breached nondisclosure agreement, you will be entitled to seek contractual damages. Misappropriation of trade secrets, copyright infringement, violation of fiduciary responsibility, conversion, trespass, and patent infringement are all legal options.

NDAs are a nearly foolproof approach to ensure that personal information is kept safe in a number of scenarios. When signing or drafting a document, it’s important to understand how these legal agreements function, since being well-informed will help you make the greatest legal choices now and in the future. A broken nondisclosure agreement might be a pain, but it doesn’t have to be a struggle. Understanding your rights, alternatives, and legal remedies may help make coping with contract violations less difficult.