Skip to main content
No items found.
logo dropboxsign
Why Dropbox Sign?
Expand or collapse accordion

What you can do

Sign documents online
Create electronic signatures
Choose or create templates
Fill and sign PDFs
Complete online contracts
Document management
Explore features
icon arrow right

Use Cases

Sales and business development
Human Resources
Start-ups
Financial technology
Property
On-demand services
Products
Expand or collapse accordion
icon dropbox
Sign
Make it easy to send and sign
icon dropbox
Sign API
Integrate eSign in your workflow
icon dropbox fax
Fax
Send faxes without a fax machine
icon dropbox integrations
Integrations
We meet you where you work
Resources
Expand or collapse accordion
Blog
Workflow expertise & product news
Customer stories
Real-world stories with real results
Help Centre
In-depth guidance for our products
Resource library
Reports, videos and info sheets
Developers
Pricing
Expand or collapse accordion
Dropbox Sign pricing
Find the right plan for you
Dropbox Sign API pricing
Real-world stories with real results
Contact sales
Sign up
Contact sales
Sign in
Expand or collapse accordion
Dropbox Sign
Dropbox Forms
Dropbox Fax
Free trial
Blog
/
Human resources advice

How using employee NDAs protects your business

by 
Cory Shrecengost
February 22, 2023
6
minute read
editorial illustration. A person is dancing with a key and the document has a lock
icon tooltip

New look, same great product! HelloSign is now Dropbox Sign.

icon close

With the amount of hard work and dedication required to build a successful company, no business wants its secret sauce to fall into the wrong hands or compromise the privacy of its customers. It’s why businesses often use employee NDAs—an effective way to protect your most private and valuable information.


If you're considering using an NDA for employees, it's important you understand the benefits, the downsides, what should be included, and how to make your NDA as easy to sign as possible.


Here's what you need to know.


What is an employee non-disclosure agreement (NDA)?

An employee NDA (non-disclosure agreement) is a legal contract between you and your employees in which they agree not to disclose any confidential or proprietary information about your company.


Using NDAs for employees is becoming an increasingly common practice, as more and more businesses focus on protecting the data they collect and the concepts they create from competitors.


When should you use an NDA for employees?

The short answer is anytime you want to protect your business’s private or proprietary information. However, there are a few more specific benefits of NDAs to consider.


To protect your business’s private information

An NDA is most useful in helping protect your company's most confidential information—trade secrets, customer data, financial records, and much more—not just from competitors but also from anyone else who doesn’t have authorized access to your private data or intellectual property. This can include customers, unauthorized employees, or other external organizations.


When employees sign an NDA, they are agreeing to refrain from unapproved disclosure of confidential information, especially in a way that could be harmful to your business. Though, be aware that an NDA isn’t an iron-tight defense to information leaks—people can still purposely or accidentally divulge private information, but an NDA provides good incentive for employees to think twice about what they share.


To prevent competitors from learning your secrets

Although your employees bring plenty of value to your company, you also invest a lot of time, training, and education into them. Losing those investments, especially to competitors, can be disappointing at best or costly at worst.


If you've ever been concerned about employees leaving and taking your confidential information with them to a rival company, an NDA encourages ex-team members to be cautious about what they disclose. Whether they quit or get terminated, former employees who signed an NDA won’t be able to share your proprietary information with your competitors without risking legal action.


To ensure employees know what information is confidential

Although some types of information are more easily understood as proprietary, like a secret recipe, a lucrative algorithm, or a private clientele list, others may not be so obvious.


Generally, most employees don’t mean to maliciously share or use confidential information, they may simply be oblivious as to what is disclosable and what isn’t. That’s why an employee NDA is a good way to help employees understand boundaries and clear up any confusion about what information should remain secret.


What are the downsides of using an employee NDA?

While the pros outweigh the cons, it’s still important to be mindful of the risks that come with using employee NDAs.


For one, NDAs can be difficult to enforce. If an employee does violate their NDA, depending on what information was divulged, you may find it tricky to prove in court that the NDA was breached.


Additionally, courts can rule in favor of the violating employee if the NDA is deemed too restrictive. Plus, even if you do win in court, legal fees can be expensive.


NDAs, if used inappropriately, also have the potential to create feelings of mistrust between you and your employees. If your teams feel like they’re being pushed to sign an NDA to keep their job or gain a promotion, this can lead to resentment or even dissuade employees from sharing their best ideas.


Employee NDAs that are too restrictive can also make potential new hires less enthusiastic to join your company.


It’s best to be prudent and reasonable with the details of your NDA in a way that keeps your business protected while still encouraging a collaborative, innovative environment for your employees.


Are NDAs worth it?

Ultimately, you’ll need to weigh the costs and benefits of NDAs for your company, but using this agreement is generally a good idea for businesses that need to safeguard confidential information.


An NDA is primarily an effective preventative measure, which is helpful especially if you’ve had issues with data leaks in the past or if you want to tighten up security around any highly-sensitive material.


Of course, not every employee will be happy about signing an NDA, but there are a few things you should keep in mind before asking to make the process go smoothly.


How do I ask someone to sign an NDA?

The best way to approach getting an NDA signed is to simply explain to employees why you're asking them to sign. Be honest and transparent about your reasons, and explain how it will benefit them as well as the company.


Once you've approached your employees about NDAs, give them some time to read over the contract and think about it before asking them to sign. And if they have any questions, be sure to answer them sincerely and thoroughly.


If you’re requiring employees to sign an NDA before they begin employment, you can also present the agreement along with other hiring documents.

‍

Looking for a free NDA template?
Customize your own employee NDA with our free NDA template.
Download
Arrow icon


What should be included in an employee NDA?

Below are a few elements that any employee nondisclosure agreement should have, but you may need to include additional information and clauses depending on the specific needs of your business. For that reason, before asking employees to sign your NDA, be sure to consult with a lawyer.

‍
Involved parties

These include the employer (the disclosing party), the employee (the receiving party), and all other involved representatives (officers, directors, partners, managers, etc.).


Confidential information

Specific details about what data or IP is considered confidential and protected by the agreement.


Confidentiality obligations

Disclosure provisions and what counts as a violation. The NDA can also state that your company owns all concepts produced by the employee after they leave.


Time frame

The date when the agreement becomes valid and the date when it expires.


Signatures

All involved parties should sign and date the agreement after reading thoroughly.


How do electronic signatures make completing NDAs a breeze?

If you're looking for a way to make the NDA process easier for your team, use an eSignatures solution like Dropbox Sign. All you need is an internet connection to sign documents electronically from anywhere in the world, which is especially helpful when you have remote employees on your team.


With Dropbox Sign, once you’ve determined the standard language of your NDA, you can eliminate most of the manual work by templating it. With a pre-made template, preparing an NDA can be as simple as entering your employee’s contact information and hitting send.


Plus, you get the ability to track who has and hasn’t signed the NDA and send out automated reminders—keeping the process moving without a hitch and making signing both easier and quicker for employees.


Make signing fast and smooth with eSignatures

In short, an NDA can be a valuable tool for protecting your business, but it's important to think through all the implications of using one in your company before you begin. Make sure you understand what information is covered by the agreement, and consult with an attorney if you have any questions.


If you’re looking for a tool that will make signing NDAs as smooth as possible and speed up your hiring process, Dropbox Sign helps new employees finish onboarding paperwork up to 3x faster.

‍

Set up your NDA now
Sign up for a free trial of Dropbox Sign and begin sending your own employee NDA within minutes.
Sign up
Arrow icon

Stay in the loop

Done! Please check your inbox.

Thank you!
Thank you for subscribing!

Lorem ipsum

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

Lorem ipsum
icon arrow right
icon close

Up next:

illustration of a man with a ladder standing on a bunch of shapes slowly assembling them in a document
Human resources advice
4
minute read

Is it time to update your employment contracts?

A man is opening a handbook up and a bright shining light is showing on his face
Human resources advice
7
minute read

How to get started with an employee handbook

Video

Electronic ID eID and signer verification with Dropbox Sign

Products
Dropbox SignDropbox Sign APIDropbox FaxIntegrations
Why Dropbox Sign
Electronic signaturesSign documentsSign and Fill PDFsOnline contractsCreate electronic signaturesSignature editorSign word documents
Support
Help CentreContact salesContact supportManage cookiesGetting started: Dropbox SignGetting started: Dropbox Sign API
Resources
BlogCustomer storiesResource CentreLegality guideTrust centre
Partners
Strategic PartnersPartners locator
Company
CareersTermsPrivacy
icon facebookicon youtube

Accepted payment methods

Mastercard logoVisa logoAmerican Express LogoDiscover logo
CPA Compliance BadgeHIPAA compliance badgeSky High Enterprise Ready badgeISO 9001 Certified badge

Dropbox Sign electronic signatures are legally binding in the United States, European Union, United Kingdom and in many countries around the world.
For more information, please view our Terms and Conditions and Privacy Policy