Should your Agricultural Business Consider a Non-Disclosure Agreement?
Catharine Daniels, Attorney, OSU Extension Agricultural and Resource Law Program
Attorneys across Ohio recently came together for the 2013 Ohio Agricultural Law Symposium to learn about current legal issues for Ohio farmers and agribusinesses. In a session about protecting the farm and agribusiness, Cari Rincker, a food and agricultural law attorney in New York City, discussed why farm and agribusinesses might consider using a Non-Disclosure Agreement (NDA) to safeguard confidential business information.
An NDA is not typically a tool that a farm or agribusiness would think of using in a business transaction. According to Rincker, however, NDAs are underutilized in the food and agriculture industry. Many farms and agribusinesses develop their own ideas, concepts, know-how, trade secrets, intellectual property, business plans or financial information. Preventing other parties from disclosing these types of information can be important to the long-term health and viability of the farm or agribusiness.
Rincker highlighted two common situations for using an NDA. One is when a farm or agribusiness is entering into business discussions with another party; confidential information could be disclosed during the course of these discussions. For example, if a farmer approached a website developer about his or her proposed online agribusiness, that farmer may wish to have an NDA with the website developer to keep the business plan confidential. The second situation concerns employees or independent contractors. An NDA binds employees and contractors to confidentiality about private information they acquire from working for the business. An agribusiness may want a bookkeeper to maintain confidentiality about business finances, for example.
What's in a Non-Disclosure Agreement? According to Rincker, an NDA should address at least these questions:
- Who will be exchanging confidential information?
- What is the purpose of the exchange of confidential information?
- What type of information will be considered “confidential” for purposes of protection under the NDA?
- How can the confidential information be used and who can use it?
- How will the secrecy of the confidential information be maintained?
- How long will the confidentiality of the information be maintained?
- What are the consequences of a breach or misuse of the confidential information?
Maintenance of confidential information should not be taken lightly, states Rincker. If your farm or agribusiness could be harmed by the disclosure of private information, talk with your attorney about an NDA. For more information on NDAs, visit the Rincker Law website and blog at http://rinckerlaw.com/blog/.