Is Your NDA Actually Enforceable?

Most business owners don’t think twice about their confidentiality agreements. You signed one when you brought on a partner. Your employees probably signed them during onboarding. Vendors, contractors, and prospective buyers during a merger. NDAs are everywhere. But that doesn’t mean they’ll actually protect you when something goes wrong.

Some confidentiality agreements look solid on paper but fall apart the moment they’re tested in court. If you’re running a business in Potomac or anywhere in Montgomery County, it’s worth knowing whether yours would hold up before you ever need to find out the hard way.

Why Some Confidentiality Agreements Fall Apart

Maryland courts take confidentiality agreements seriously. They recognize that businesses have a legitimate interest in protecting proprietary information. That said, courts won’t enforce an NDA that overreaches, and they won’t fill in the gaps if your agreement was poorly drafted.

Even small mistakes in how an NDA is written can create big problems down the road. And the issues we see most often tend to fall into a few predictable categories.

Vague or Overly Broad Language

This one comes up a lot. An NDA that defines “confidential information” as basically everything related to the business is asking for trouble. Courts want specificity. They want to see that the agreement identifies the actual types of information being protected, whether that’s customer data, pricing models, proprietary processes, or something else concrete.

When the language is so broad that it could include general industry knowledge or skills someone picked up on the job, a court may toss the whole thing. You can’t reasonably prevent someone from using what they already know or what’s already publicly available.

No Clear Time Limit

How long should an NDA last? It depends. Some trade secrets justify longer protection periods. But an agreement that imposes confidentiality obligations indefinitely, with no end date and no justification for why it needs to last forever, is going to raise eyebrows in front of a judge. Maryland courts expect these restrictions to be reasonable in duration, and “forever” rarely qualifies.

Lack of Consideration

This one catches a lot of employers off guard. Every enforceable contract needs consideration, something of value exchanged between the parties. When you hire someone new, and they sign an NDA as part of the offer, the job itself typically satisfies that requirement. Simple enough.

But what happens when you ask a current employee to sign a new confidentiality agreement six months or two years into the job? If you’re not offering anything additional in return, that agreement may not be enforceable. Maryland courts have addressed this more than once, and continued employment alone doesn’t always cut it as adequate consideration when new restrictive terms show up after hiring. The Maryland Courts website offers access to relevant case law and contract enforcement resources for those who want to dig deeper.

Warning Signs to Watch For

Whether you’re reviewing an NDA you already have in place or drafting one for a new business relationship, watch for these red flags:

• The agreement doesn’t clearly define what counts as confidential information
• There’s no stated duration for the confidentiality obligations
• The scope is broad enough to restrict someone from using general knowledge or skills they picked up on the job
• The agreement was signed without any new benefit or compensation offered in exchange
• The document doesn’t identify the parties or their obligations with reasonable clarity
• The NDA tries to prevent someone from reporting illegal activity or cooperating with government investigations

Any single one of these can weaken your NDA. Stack a few together, and you’re likely looking at an agreement that won’t survive a challenge.

What You Can Do About It

If your confidentiality agreement has gaps, you’d rather find out now than after someone walks out the door with your client list. Renegotiating or redrafting while the business relationship is still intact costs a fraction of what it takes to litigate a flawed agreement after a breach.

A Potomac commercial litigation lawyer can review your current agreements and tell you where you stand. Are your definitions specific enough? Is the duration reasonable? Would a court actually enforce what you’ve got? Those are questions worth answering before they become urgent.

Protecting What You’ve Built

Your confidentiality agreements should do real work for your business. They should protect trade secrets, client relationships, financial data, and strategic plans without crossing the lines that Maryland courts have drawn. But they can only do that when they’re properly written, backed by real consideration, and reasonable in scope.

At Brown Kiely LLP, our attorneys have spent decades handling commercial disputes across Maryland, including cases involving breached NDAs and trade secret misappropriation. If it’s been a while since anyone reviewed your agreements, or if you’re worried a current NDA won’t hold up, a Potomac commercial litigation lawyer at our firm can take a close look and help you figure out the right path forward.