More Than Keeping Secrets: The Importance of Non-Disclosure Agreements in Lawsuits

Can you keep a secret? If you sign a non-disclosure agreement during a lawsuit, you should hope that you’re good at staying quiet. Blabbing about the details could have major consequences for your case!

The Basics of NDAs

A non-disclosure agreement, or NDA, is a legal agreement that binds one or more parties to non-disclosure of confidential or proprietary information.  An NDA might come into play when:

  • A new employee joins a company and the company wants to prevent them from sharing data or trade secrets
  • Business is outsourced or subcontracted to someone, like a website developer or a freelance writer
  • A patent, new product, or other type of intellectual property is being discussed
  • People are receiving an early preview of something, like a pre-release screening of an upcoming movie

In most of these situations, the agreement is a unilateral agreement. These agreements restrict one party from disclosing information. In the case of the new employee, for example, the employee will obtain more information about the company than the company will obtain about them. This is why the employee is the one restricted by an NDA.

The Role of NDAs

In legal situations, there are many reasons why one or more parties might want an NDA. During lawsuits, there is a lot of sensitive material that comes up. Some parties might not want others to know that they were involved, or do not want to reveal their settlement. NDAs during legal matters generally affect two or more parties.

While NDAs exist to protect private information, they do not always have positive effects. For example, if a car company was a defendant in a lawsuit over an airbag defect, they might admit fault and pay compensation to the victims, but ask for a confidentiality agreement to prevent bad press about their faulty airbags. This could prevent others from learning about the problem. NDAs are also a frequent obstacle in cases of sexual assault, as some of the recent  celebrity cases have shown. For example, some of the female victims of film producer Harvey Weinstein said they were unable to come forward with their accusations because of NDAs. In situations like these, NDAs can stifle the truth, rather than protect delicate information.

Big Mouth, Big Consequences

Despite their sometimes negative impact, NDAs are still incredibly important in the legal field—and breaking one can have big consequences. When someone breaks an NDA, it means they disclose any information that they agreed not to publicly share. They could do this by simply telling a friend about the case, by sharing information on Facebook, or by publishing information in a book or article. If their silence was part of the agreement, they could lose their settlement by sharing confidential information. The other party might also be able to sue them for damage to their public reputation or a loss of income.

If you are asked to sign an NDA, an attorney can help you understand the complexities of your agreement. It might seem easy to uphold a confidentiality agreement, but before you sign, you’ll want to know exactly what you’re promising to not talk about.

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The attorneys at Perenich, Caulfield, Avril & Noyes represent those involved in car accidents, motorcycle accidents, bicycle accidents, pedestrian accidents, and other types of personal injury matters. Our firm is one of the oldest personal injury law firms in Tampa Bay. There are no attorneys’ fees or costs unless we prevail for you. Call our office 24 hours a day at 727-796-8282 or simply click here to schedule a free case consultation.

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