Section 33 Nondisclosure Covenants and Agreements

• Library: Bus Trans 2005

Unlike noncompetition covenants, courts readily enforce nondisclosure covenants because they are designed to protect the employer’s valuable business information and not to prohibit competition. Like the noncompetition covenant, the nondisclosure covenant may be contained in a separate agreement, an employment contract, or the acquisition agreements.

A nondisclosure agreement is written to prevent the disclosure of confidential business information to the employer’s competitors. Although an employer cannot prevent a former employee from using, in subsequent employment with a competitor, the general knowledge gained while working for the employer, the employer can prevent the disclosure of specific confidential information...