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Please give your valuable comments.
BACKGROUND:-An organization enters into a confidentiality agreement with customers. But the company does not have a separate NDA with employees and may face some resistance if a NDA is now initiated with existing employees.
The employees are given an hand-book / manual (a kind of policy manual) at the time of joining. The manual contains a confidentiality clause ( e.g. exclusive customer related information received should not be disclosed even after resignation). The employee signs in duplicates and a signed copy of employment manual is with HR.
THE QUESTION:-Will the he / she be bound by this clause after leaving the company and joins with a competitor? Whether the company can initiate legal action on the basis of this clause?
Please clarify.
Sambasivam
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Dear Sambasivam,
An employee is bound by Confidentiality Clause only during the tenure of his employment with the company. You can initiate legal action on an employee only when he breaches the clause agreed upon and signed by him / her during the course of employment. You cannot stop an employee from joining a competitor. Once he is relieved from the employment, previous employer cannot exercise / impose any clause / condition stipulated earlier.
With regards,
Madhusudan
Hi,

Generally companies ask their employees to sign similar clause of confidentiality which seems sufficient. But sometime your customer want you to get separate NDA sign with employees for their satisfaction.

I think if your customer want to get NDA signed with employees then you will have to do it on the name of customer satisfaction. Though you already have a clause in employee handbook.

I feel you call for a meeting with employees and make them aware of NDA.

Explain why there is no harm in signing NDA.

Explain them why and how is it good for company business.

Because most of the people think signing NDA means signing a time bond with employer or can not join the competitor (could be true).

No NDA can stop confidentiality breach, NDA just create an ethical understanding between employer and employee on confidentiality of trade secrets.

NDA is just there to make people aware of seriousness of confidentiality and make them responsible to maintain confidentiality.

I feel, if your customer wishes then your company and all employees should respect their demand of confidentiality.

Thanks

Vikas
Sorry
I completely disagree with this contention
Employee's duty to keep confidential information received during employment as far as it relates to trade secrets, customer confidential information, etc remains even after the employee leaves. It is an implicit part of this contract of employment even if he was not signing the hr manual.
The terms of the manual signed do not get over when employment gets over, it continues to bind him in respect of things that happened during his employment. The exceptions would be any onerous requirement that hampers normal career growth. Like you can't say don't take another job or do not use the knowledge we imparted.
However, as stated by others, getting a formal nda signed is better as its enforceability is easier in courts.

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