Non-Disclosure Agreements & Defamation: 5 Things to Know Before Signing an NDA

Non-Disclosure Agreements & Defamation: 5 Things to Know Before Signing an NDA
Photo by Gabrielle Henderson on Unsplash

You’re about to start a great new job or business partnership when suddenly you’re asked to sign a Non-Disclosure Agreement (NDA). Confusion and anxiety set in. What are you agreeing to? How might this affect your freedom to speak in the future?

We talked to the best Wodonga lawyers to explore five key things you should know about NDAs and their connection to defamation.

What is an NDA and Why Does it Matter?

An NDA, short for Non-Disclosure Agreement, is a legal contract that creates a confidential relationship between two or more parties. It aims to protect sensitive information that one party wants to keep under wraps.

When you sign an NDA, you’re agreeing not to share certain information with others — anything from a company’s trade secrets and client lists to upcoming product launches or sensitive financial data.

Confidentiality vs Silencing — A Fine Line

While NDAs are powerful tools for protecting legitimate business interests, they can’t be used to cover up illegal activities. If you witness something illegal or unethical, you generally have the right to report it to the appropriate authorities, regardless of any NDA you’ve signed.

However, some NDAs may try to discourage whistleblowing by using broad language or intimidating clauses. This is why it’s crucial to read the agreement carefully and understand exactly what you’re agreeing to.

Defamation: The Hidden Trap in Some NDAs

Defamation — false written (libel) or spoken (slander) statements that harm someone’s reputation — is where NDAs can sometimes venture into dangerous territory.

Some NDAs include clauses that prohibit making disparaging remarks about the company or individuals covered by the agreement. While this might seem reasonable at first, it can also be used to silence legitimate criticism. 

The key thing to remember is that truth is generally a defense against defamation. If what you’re saying is factual and provable, it’s not defamation.

How Far Does Your NDA Reach?

When reviewing an NDA, pay close attention to its scope and duration. These factors can significantly impact your future actions and opportunities.

Scope: What exactly are you agreeing to keep confidential? Is it specific information related to a particular project, or does it cover all knowledge gained during your association with the company?

Duration: How long does the NDA last? Some agreements have a set expiration date, while others might claim to last indefinitely.

Remember, it’s okay to negotiate these terms. If something seems unreasonable or overly restrictive, find a middle ground that protects both parties’ interests.

What Happens if You Break an NDA?

Finally, let’s talk about what could happen if you breach an NDA. The consequences can vary widely depending on the specific terms of the agreement and the nature of the breach.

Common consequences might include:

  • Financial penalties: You might be required to pay damages to the other party.
  • Legal action: The other party could sue you for breach of contract.
  • Reputational damage: Breaking an NDA could harm your professional reputation.
  • Injunctions: A court might order you to stop sharing the protected information.

It’s important to note that these consequences are typically civil matters, not criminal ones. However, the stress, cost, and potential career impact of legal battles can be significant.

Knowledge is Power

When it comes to NDAs, knowledge truly is power. Understanding what you’re signing, its implications, and your rights can help you make informed decisions and protect your interests.

If you’re ever unsure about an NDA you’re asked to sign, don’t be afraid to ask questions or seek legal advice. Your future self will thank you for taking the time to understand and negotiate fair terms.

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that grow their businesses. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

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