What's an NDA and When Should You Be Worried?

What Is an NDA?

A Non-Disclosure Agreement (NDA) — also called a confidentiality agreement — is a legal contract that prevents one or both parties from sharing certain information with third parties. NDAs are extremely common in business contexts: when discussing a potential acquisition, starting a new job, or working with a vendor.

Types of NDAs

Unilateral NDAs — Only one party (usually the employee or contractor) is prohibited from sharing information. This is the most common type in employment contexts.

Mutual NDAs — Both parties agree to keep each other's information confidential. Common in business negotiations where both sides are sharing sensitive information.

Red Flags in NDAs

Overly Broad Definition of Confidential Information

If everything is defined as confidential — including information you already knew before signing — the NDA may be unenforceable, but it can still be used to intimidate you.

Non-Compete and Non-Solicitation Clauses

Some NDAs are bundled with non-compete clauses that prevent you from working for competitors. These deserve especially careful review, as they can significantly limit your career options.

No Time Limit

NDAs should have an expiration date. A perpetual NDA that lasts forever is unusual and potentially problematic for trade secrets that don't actually last forever.

Covers Public Information

An NDA cannot legally prevent you from disclosing information that's already public. If the definition of confidential information includes public data, this is a drafting error or an overreach.

When an NDA Is Legitimate

Most NDAs in professional settings are reasonable. An employer doesn't want you to share their client list. A startup doesn't want you to tell competitors about their product roadmap. These are legitimate business interests.

Analyze Any NDA Instantly

Paste your NDA into our NDA Analyzer and get a plain-English breakdown of what you're agreeing to, along with any red flags, in under 30 seconds.