What You Need to Know About The Increased Use of NDAs In High-Profile Settings

September 9, 2024 | Uncategorized

Using non-disclosure agreements (NDAs) is becoming increasingly common for high-profile individuals including those with high net worth or in the entertainment industry to protect their assets, net worth, and privacy. 

While these agreements are important to protect an individual’s privacy, it’s equally essential for employees and contractors to understand their rights and responsibilities when asked to sign an NDA. Let’s discuss your rights when using an NDA and for those asked to sign an NDA the implications of signing an NDA.

What is an NDA?

Whether a high-profile individual NDA or one asked to be signed during business negotiations, the NDA’s purpose is the same: it is a legal contract designed to keep sensitive information confidential. NDAs typically outline what information is considered confidential, how long the confidentiality must be maintained, and the consequences of breaching the contract. Key elements include:

  • The duration of privacy
  • The scope of confidential information
  • The legal repercussions for violating the NDA.

Use of an NDA by a High-Profile Person

There are many reasons why an NDA would be used, the primary reason is to protect private and confidential information from being disclosed to unintended third parties. High net-worth individuals may use this as a tactic just to protect their private lives, such as celebrities asking their dates to sign an NDA to avoid a media scandal or sophisticated business owners safeguarding their ideas from being stolen and misused by competitors. 

Ensuring Your NDA Will be Enforceable and What to Do If It is Violated 

When considering whether to implement an NDA into your business practice, it is important to ensure that the NDA will be enforceable in a court of law, this includes incorporating specific language defining the parties, the confidential information to be protected, and the scope of the agreement. If any of these factors are missing, then an NDA may not be upheld in court.

Suppose a party who signed an NDA has violated it. In that case, you may demand compliance with the NDA or take legal action against the party to obtain an injunction to stop the violation or a monetary penalty. Often the damages for violating an NDA are expressly stated in the NDA itself and the parties bound have agreed to the relief in case of a violation. 

Your Rights When Asked to Sign an NDA

When asked to sign an NDA, know your rights and what you are agreeing to. Don’t feel pressured to sign immediately. You have the right to review the NDA thoroughly. Because of the complexity of some of these agreements, you should seek legal advice to understand all the terms and conditions. Don’t assume the terms are non-negotiable; you can negotiate specific clauses, such as the duration of the NDA or the scope of confidential information. Make sure you fully understand what constitutes a breach of the NDA to avoid any potential misunderstandings and legal issues down the line.

The Potential Risks and Concerns with Signing an NDA

Signing an NDA may feel intimidating, especially when working for a high-profile individual. You might feel pressured to sign the NDA to secure or keep your job, but remember that you can seek legal counsel before signing. NDAs can sometimes be overly broad, covering information that might not seem confidential to you, so ensure the terms are clear and specific. Violating an NDA may result in significant financial penalties, as high-profile individuals often have the resources to pursue legal action, which puts employees at an extreme disadvantage. It is essential to know your rights.

To protect yourself when signing an NDA:

  • Ensure all terms and conditions are documented.
  • Be fully aware of what you agree to and the potential consequences of a breach.
  • Before signing, get legal advice. 

What to Do if Accused of Violating an NDA

If you are accused of breaching an NDA, speak to legal counsel. Contact an attorney experienced in NDA litigation to understand your legal position and options. They will review the NDA to determine if you have violated any terms. They look for ambiguities or vague clauses that might work in your favor. Gather evidence supporting your case, such as communications, timelines, or witnesses who can testify on your behalf. 

We Can Help You Navigate NDAs Whether you are a high-net-worth individual looking to implement  NDAs into your business practice, or an employee asked to sign an NDA, it’s essential to understand your rights and obligations. At Rodriguez-McCloskey PLLC, we help people navigate the complexities of NDAs. Schedule a 30-minute consultation with our experienced attorneys to discuss your concerns and protect your interests. Contact us today to secure comprehensive, results-driven counsel tailored to your needs.