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An employee who signs an NDA on behalf of your company does not become personally liable—he signs for the employer. If you wish to bind an individual employee to confidentiality yourself, you do so via a confidentiality clause in his employment contract.
Who is bound by the NDA?
If you enter into a non-disclosure agreement (NDA) with another company, the companies are parties to the agreement. If a contact person signs on behalf of that company, he binds the company, not himself. If someone within that company breaches confidentiality, you should, in principle, hold the company liable, not the individual employee.
Can I have that employee co-sign personally?
Holding an employee personally liable via a company NDA usually does not work: he acts in his official capacity and the agreement lies between the companies. A signature of 'seen and acknowledged' changes little in that regard.
So how do you retain an employee?
If you wish to bind your own employees to confidentiality, include a confidentiality clause in the employment contract, possibly with a penalty clause. This way, you place the obligation directly with the employee, even for the period after the employment ends.
Two documents, two goals
Use an NDA for business relationships and a confidentiality clause for your own staff. By effectively utilizing both, you protect your confidential information both externally and internally.
Frequently Asked Questions
Is an employee liable if he violates the company NDA?
Usually not personally: he acts on behalf of the company that is a party to the NDA. You then address the company.
How do I make my own employee liable?
With a confidentiality clause in his employment contract, possibly with a penalty clause. That binds the employee directly.
Does the confidentiality clause also apply after termination of employment?
Yes, if you stipulate it that way. A well-formulated clause remains in effect after the termination of employment.
Want to properly protect your confidential information?
Our legal experts draft a confidentiality agreement or NDA and incorporate a confidentiality clause into your employment contract. Schedule a free consultation.
