What are duration and scope in an NDA?

| Mar 31, 2021 | Business Law, Employment Law |

It is not uncommon for companies to make employees sign non-competition agreements as a requisite part of hiring paperwork. Non-competition agreements, or NDAs, are an interesting aspect of contract law since they do not go into effect until after the employee has left the company.

Of course, to have your NDA be at all successful after your employee leaves the company, the courts must be willing to enforce it. Typically speaking, an NDA must be reasonable in both duration and scope in order for the courts to back them.

What is a reasonable duration for my NDA?

The hard reality is that there is not one answer to this question. It depends on the nature of your business and what exactly your NDA covers. However, this means that you, as a business owner, must have a strong understanding as to how long specific information is valuable to your business interests.

In other words, it is unlikely that the court will support an NDA that swears an employee to secrecy for eternity. In order for the court to support your NDA, you must present a reasonable scope of time.

What is a reasonable scope for my NDA?

Like the previous, there is no one single answer. Usually, scope refers to a specific geographic area. It is likely that the courts will support an NDA that prevents a former employee from directly competing with you in your geographic locale. However, the courts will not support and NDA that attempts to block a former employee from starting a similar business in a different geographical area that you do not have presence in.