Employee and Severance NDA
Create an employee or severance NDA that protects trade secrets while preserving the right to report harassment or discrimination. Attorney review available.
Introduction
An employee NDA is a confidentiality agreement between a company and a worker that limits what the worker can share about the employer's trade secrets and confidential business information. A severance NDA is the version signed when someone leaves, usually inside a separation or release agreement, and it often keeps the terms of the exit private. What separates both from a commercial NDA between two businesses is who signs it: an employee NDA cannot stop a worker from reporting or discussing unlawful conduct. The federal Speak Out Act of 2022 makes a pre-dispute NDA or non-disparagement clause unenforceable to the extent it covers sexual assault or sexual harassment, and a worker's right to report to agencies like the EEOC, the NLRB, and the SEC cannot be waived. Many states add their own limits on top. DocDraft drafts an employee or severance NDA from your facts, with those protected-disclosure carve-outs built in, and attorney review is available before anyone signs.
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Key Things to Know
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An employee NDA protects trade secrets and confidential business information. It can cover client lists, pricing, formulas, processes, and financial data the employer has a real interest in keeping private.
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It cannot silence unlawful conduct. Federal and state law prevent an employee NDA from stopping a worker from reporting or discussing harassment, discrimination, or other illegal workplace acts.
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The federal Speak Out Act applies everywhere. A pre-dispute NDA or non-disparagement clause is unenforceable to the extent it covers a dispute involving sexual assault or sexual harassment.
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Government reporting rights cannot be waived. An employee keeps the right to file a charge or talk with agencies like the EEOC, the NLRB, and the SEC, no matter what the agreement says.
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A severance NDA usually travels with a release of claims. When someone leaves, the confidentiality terms are often part of a broader separation agreement, and older workers get extra time to review it.
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Trade-secret agreements need a whistleblower immunity notice. Federal law reduces the remedies an employer can recover if the NDA leaves out the immunity notice required under the Defend Trade Secrets Act.
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State law can add requirements. Many states restrict what an employee NDA may cover and require specific carve-out language, so the enforceable version depends on where the employee works.
Key Decisions
Defining Confidential Information
This sets the scope of what the employee must keep private. It should cover legitimate business information and leave out anything the law does not let an employer restrict.
Trade secrets and proprietary business information only
The most common and lowest-risk scope. Covers formulas, processes, and client and pricing data.
Most Common OptionTrade secrets plus confidential financial and operational data
Common for senior employees who had broad access to sensitive company data.
A narrow scope, such as the severance amount only
Used in some separation agreements that keep only the settlement figure private.
The two are governed a little differently. A severance NDA is usually part of a release of claims and, for workers 40 or older, carries federal review periods.
An onboarding NDA signed at the start of employment
The standard case. Signed as a condition of employment to protect information going forward.
Most Common OptionA severance or separation NDA signed at exit
Signed at the end of employment, usually alongside severance pay and a release of claims.
Protected Disclosures and Legal Limits
Federal law and many state laws bar an NDA from concealing unlawful conduct. The agreement should preserve the employee's right to report and discuss it.
Keep the standard protected-disclosure carve-outs
Recommended. Preserves the Speak Out Act, government-agency reporting, and the Defend Trade Secrets Act immunity notice.
Most Common OptionAdd the specific carve-out language your state requires
Needed in states whose law prescribes exact wording preserving the right to disclose unlawful workplace acts.
Non-disparagement clauses are increasingly limited. If included, it must still let the employee disclose conduct they believe is unlawful.
No non-disparagement clause
The simplest and lowest-risk choice. The agreement covers confidentiality only.
Most Common OptionInclude a lawful non-disparagement clause with carve-outs
Used when the company wants a non-disparagement promise, written to preserve protected disclosures.
Signing and Enforcement
Confidentiality can last indefinitely for genuine trade secrets, or run for a set term for other information.
For as long as the information stays confidential
The most common approach, and the strongest for true trade secrets.
Most Common OptionA fixed number of years
Used when the parties prefer a defined end date for the confidentiality obligation.
Consideration is what makes the agreement enforceable. At hire it is the job itself; at separation it is usually severance pay, and some states require separate consideration.
Signed as a condition of employment
The standard for an onboarding NDA. The job offer is the consideration.
Most Common OptionSeparate payment or severance for signing
The standard for a severance NDA, and required in states that mandate separate consideration.
Employee and Severance NDA Requirements
Company Legal Name
The full legal name of the employer entity that owns the confidential information.
Employee Name
The full legal name of the employee or departing worker who is agreeing to confidentiality.