Non disclosure agreement (NDA) is entered into between the Employer (the owner of the Confidential Information) and the Employee (the receiver of the Confidential Information) with respect to the protection of confidential information/ documents, received by employee during the tenure of his/ her employment with the Company, from sharing without prior permission of Employer. NDA is a legal contract between two parties that outline the Confidential Information shared by the Parties but restrict the access to the other third party. For a business to grow, it is utmost important to keep certain information intact within its organisation. Therefore, employer needs to ensure that the confidential information is not passed on to any person without his permission, which may otherwise create hindrance in the growth and success of its business.

1. NDA with Employees
“A Business grow when Secrets are kept private and Confidential”

2. Introduction
Every business has its own set of ideas and strategies of doing work which may be in the form of
inventions, innovations, business models, trade secrets, business acquisition model, communication
model, patents etc.
These ideas and strategies needs to be shared with Employees, Business Associates for the growth and
success of the business. However, it may not be necessary that the receiver treat them as confidential. It is
often witnessed that the confidential information, which should only confined to the business and the
other party, if revealed, whether formally or informally, to the Public/ the Competitors / any other third
person it may extremely affect the business.
Therefore, it becomes important for the management or the promoter to ensure that to whomsoever it
shares its confidential information should not disclose the same to any other person without their
permission. This can be done by entering into a nondisclosure agreement with them so that the operations
of the Company can be carried out in smooth manner and everything will be hunky-dory.
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3. Non disclosure agreement (NDA) is entered into between the Employer (the owner of the Confidential
Information) and the Employee (the receiver of the Confidential Information) with respect to the
protection of confidential information/ documents, received by employee during the tenure of his/ her
employment with the Company, from sharing without prior permission of Employer.
NDA is a legal contract between two parties that outline the Confidential Information shared by the Parties
but restrict the access to the other third party. For a business to grow, it is utmost important to keep
certain information intact within its organisation. Therefore, employer needs to ensure that the confidential
information is not passed on to any person without his permission, which may otherwise create hindrance
in the growth and success of its business.
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Meaning of NDA

4. 1. Define Confidential Information: It is very important that the Definition of Confidential Information
must be specified very clearly as only this will decide that what would be considered as confidential
document/ information. The information to be considered as confidential depends solely upon the
nature of the Business.
2. Condition for non disclosure: The Employer should specifically mention the situations where
information shall not be shared to other person without his/ her prior permission.
3. Duration: The duration for which the Agreement shall remain valid. The duration clause underlines the
timeline through which the liability for breach of terms and condition of the NDA is undermined.
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Important Terms for NDA

5. 4. Exceptions for non disclosure: Sometime situation occurs that it become very essential for the
employees to disclose the information, in such a situation, it is always suggested that there must be
some exemption from Non sharing of information’s like:
• is, at the time of disclosure, publicly known and made generally available in the public domain;
• becomes, at a date later than the time of disclosure, known to the trade or the public otherwise than a wrongful
act or negligence or breach of this Agreement of or by the Receiving Party;
• is known or possessed by Receiving Party free from any obligation of confidentiality, as evidenced by Receiving
Party’s written records immediately before receipt of the Confidential Information from Disclosing Party;
• is disclosed to Receiving Party in good faith by a third party and the Receiving Party was not aware that the third
party had a duty of confidentiality to Disclosing party in respect of the information; or
The burden of proof shall be on Receiving Party to establish the existence of facts by clear and
convincing evidence that information was shared due to any of the foregoing exceptions and also this
needs to be secured that even in above cases, information would be shared on “Need-To-Know”
basis and with prior written intimation to the Employer.
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Important Terms for NDA

6. 5. Non Compete clause: It is very much important to insert non compete clause. This helps the Employer
to impose restriction on the Employee to enter into a competitive business immediately after
resigning from the employment services. However, an open ended Non-Compete Clause, doesn’t
survive and enforceable under court of law, so it should be drafted in proper manner and considering
the legal enforceability under court of law.
6. Handover of Confidential Information: Any confidential information accessed by the Employee during
his tenure is to be handed over in the same manner to the Employer. The Employer shall be the sole
owner of the Confidential Information.
7. Assignment of Intellectual Property Right: It is pertinent to mention that if some Intellectual property
right has been created during the tenure of employment of any employee due to the work done by
that employee, then it shall be the sole property of the Company, and Employee shall take all steps to
give or assign such right to the employer.
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Important Terms for NDA

7. 9. Customer and Vendor Confidentiality: The Employee recognises that it is essential to the Company's
success that all customer and vendor information be deemed to be confidential and be properly
treated as a confidential trade secret. Therefore, the Employee agrees not to use or disclose any such
customer or vendor information except as may be necessary in the normal conduct of the Company's
business for the specific customer or vendor, and after the end of his/her employment with the
Company, he/she will return all such materials to the Company.
10. Continuing Obligation: The obligations of the Employee under this Agreement shall be continuing until
the Confidential Information disclosed to the Employee is no longer considered confidential by the
Company.
11. Notice of Breach: In case during the period of employment, the Employee disclose any confidential
information or he/ she come to know about the event of breach of term, then Employee must notify
to the Employer so that remedial action can be taken.
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Important Terms for NDA

8. 12. Injunctive Relief and Indemnification: This clause states that the Employee understands and agrees
that monetary damages will not be sufficient to avoid or compensate for the unauthorized use or
disclosure of any of the Company's Confidential Information. Accordingly, the Employee understands
and agrees that in the event of any breach or threatened breach of this Agreement, the Company, in
addition to any other remedies at law or in equity it may have, shall be entitled, without the
requirement of posting a bond or other security, to equitable relief, including injunctive relief and
specific performance. The Employee hereby agrees to indemnify and hold harmless the Company
from any damage, loss, cost or liability (including legal and expert witnesses' fees and the cost of
enforcing this indemnity) arising out of or resulting from any unauthorized use or disclosure by the
Employee of the Confidential Information.
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Important Terms for NDA

9. 13. Indemnity Clause: According to Section 124 of the Indian Contract Act, 1872 Indemnity means “A
contract by which one party promises to save the other from loss caused to him by the contract of
the promisor himself, or by the conduct of any other person, is called a "contract of indemnity".
Under the Confidentiality Agreement with the Employee, Indemnity clause would strive to protect the
Employer from the wrong doing of other Employee under the Agreement. In case of breach of duty
on the part of Employee, then he/ she had to indemnify the Employer and make good the loss
suffered.
14. Severability clause: In case of any clause of the agreement becomes inoperative, for time being in
force, then only the clause repugnant shall be treated as inoperative and not the entire agreement.
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Important Terms for NDA

10. 15. Termination: Terms on which the agreement stands to be terminated shall be mentioned specifically
in the Agreement. Few Instance for the same are :
• on completion of service
• on expiry of the term
• continuous delay in completing the work etc
• misuse of information and records
• on breach of terms of the Agreement
Notice Period which needs to be given need to be mentioned.
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Important Terms for NDA

11. 16. Arbitration: In case of any dispute, the Parties can mutually agree to settle the dispute through
arbitration also and same shall be carried out as per the provision of Arbitration and Conciliation Act,
1996 and amendment therein from time to time.
17. Jurisdiction: The agreement should define the jurisdiction of the Court which can be approached by
the Parties to the Agreement in case of any dispute arose.
Aforesaid list of clauses are not exhaustive one but inclusive one, same can be modified and additions can
be made depending upon nature of business and type of employees being hired.
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Important Terms for NDA

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