Employee Confidentiality Agreement (NDA)
An employee NDA sets clear boundaries around confidential information — and is most important for employees with access to trade secrets, client lists, or proprietary processes.
What is a Employee Confidentiality Agreement (NDA)?
An Employee Confidentiality Agreement (sometimes called an Employee NDA or Non-Disclosure Agreement) defines the categories of confidential information the employee must not disclose during or after their employment. While employment contracts typically include confidentiality clauses, a standalone NDA provides a more detailed and enforceable framework — particularly useful for senior roles, roles with client access, or roles involving proprietary technology.
In Australia, confidentiality obligations in employment are partly implied by law (employees have an implied duty not to misuse confidential information in the course of employment) and partly contractual. The implied duty alone provides limited protection after employment ends. A well-drafted confidentiality agreement, with a reasonable post-employment duration and clearly defined categories of information, provides significantly stronger protection.
When do you need a Employee Confidentiality Agreement (NDA)?
- ✓For senior employees or those with access to trade secrets, client lists, or proprietary processes
- ✓When onboarding employees in roles where confidentiality is critical
- ✓As a supplement to an employment contract that has only a basic confidentiality clause
- ✓When an existing employee moves into a role with significantly increased access to confidential information
Key provisions to include
Definition of Confidential Information
Comprehensive list of what constitutes confidential information — business plans, financial data, client lists, source code, pricing, methodologies.
Obligations During Employment
Must not disclose, copy, or use confidential information for any purpose other than the employment.
Post-Employment Obligations
Duration (e.g. 2 years) and scope of obligations after employment ends.
Exclusions
Information that is publicly available, was known to the employee before employment, or is required to be disclosed by law.
Return of Information
Employee must return all confidential information in any form on termination.
Remedies
Acknowledgement that breach may cause irreparable harm and that injunctive relief may be sought.
Common mistakes to avoid
Defining confidential information too broadly — courts are less likely to enforce agreements that catch information the employer cannot legitimately claim to protect
Setting post-employment durations that are unreasonably long — 2 years is generally acceptable for most roles; longer periods need strong justification
Not getting the NDA signed before the employee starts, or at the start of employment alongside the contract
Treating the NDA as a one-time document — update it when the employee's access changes significantly
Frequently asked questions
What information can I genuinely protect with an employee NDA in Australia?
Courts will enforce confidentiality obligations for genuine trade secrets and confidential business information — client lists, proprietary processes, pricing strategies, product development plans, source code, and financial data are well-recognised categories. What courts will not enforce is an obligation so broad it prevents the employee from using general skills and knowledge acquired in the course of employment in their next role. The distinction between 'confidential information' (protectable) and 'general know-how' (not protectable) is a fine line, so specific definition matters.
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