What Happens if You Break an NDA (Violation Penalties & Remedies)

What happens if you break an NDAPrior to signing a non disclosure agreement (NDA), you may want to know what happens if you break an NDA. Knowing the potential penalties and scenarios for breaching an NDA can provide assurances and prepare you for worst-case scenarios. Additionally, if you believe another party breached an NDA with you, then knowing possible recourses available is the next step. 

What happens if you break an NDA in Florida?

Generally, what happens if you break a non disclosure agreement Florida will be unique to the facts and context of the breach. Relevant to the outcome will be the terms of the agreement, relevant Florida state law, and the nature of the breach of contract. 

The relationship between the parties involved will also determine the outcome. In many cases, a party that becomes aware of an NDA violation from another party may start by sending a cease and desist letter. The letter may be enough to resolve further conflict, However, some situations may require further action to stop further breaches or to recover any losses from the prior violations. 

Parties may be able to reach an understanding without court intervention through other conflict resolution channels. However, formal legal action (i.e., a lawsuit) for breach of contract is a strong possibility when parties continue to disagree or the severity of the breach causes substantial damage.

What are the penalties for breaching a non disclosure agreement?

An NDA breach penalty can come in a few different forms, but the main two are financial compensation and injunctions from a court explicitly prohibiting the breaching conduct. Penalties of financial compensation may come from a settlement agreement or an award via judgment from a state court. The amount of financial compensation an injured party may receive for breach of an NDA may include the following: 

  • punitive damages outlined in the terms of the agreement 
  • recovery for loss of business or other costly business interruptions 
  • payment for legal fees or other costs associated with pursuing claims for breach of contract 

What are the remedies for breach of confidentiality agreement?

The remedies for breach of a confidentiality agreement are similar to those for the breach of an NDA. The wronged party may receive monetary damages to reimburse or pay for any loss incurred as a result of the breach. The amount of damages can be specified under the terms of the confidentiality agreement or could a court may determine appropriate financial remedy under principles of equity. Other remedies may include court judgment prohibiting conduct that would breach the agreement.

When and how to get around a non disclosure agreement lawsuit

Non disclosure agreements can be important legal tools for protecting sensitive information in both commercial and personal relationships. Disclosure of otherwise confidential information is a necessity for furthering some businesses, but an NDA provides assurances that the obliged party will maintain the confidentiality. Popular types of NDAs may include contracts to: 

  • Protect trade secrets (e.g., customer lists and other business information) 
  • protecting intellectual property 
  • prevent misappropriation of trade secrets from former assistants or other employees through employment contracts
  • maintain private information 

While many NDAs are binding contracts, situations may arise that make you wonder how to break a non disclosure agreement. Some NDAs may not be fully enforceable because of state law or other policies that would make it difficult for a court to uphold. 

Florida, for example, places restrictions on restraints of trade or commerce (e.g., NDA agreements). These restrictions limit NDAs to specific geographic locations and trade areas. The time period for an enforceable NDA can also have its limits based on Florida law depending on the context (e.g., an NDA in an employment contract versus and NDA in an acquisition). An NDA might also be unenforceable if its purpose is illegal (i.e., in furtherance of criminal activity). 

Aside from enforceability issues, you may also be able to void or get out of an NDA, which are also often included in a non circumvention agreement, through negotiating with the holder of the NDA. This may involve a buyout or simply obtaining consent to disclose protected information. 

Our experts can help with breach of non disclosure agreement cases

Cueto Law Group is a business law firm that represents clients in breach of NDA lawsuit cases and other commercial litigation matters. Our attorneys understand the importance an NDA can play in protecting vital business information from competitors. If you have any questions about pursuing remedies for a breach of an NDA agreement, please do not hesitate to schedule a consultation with our office. 

Contact Cueto Law Group today.

FAQs on NDA violation

Below are some additional answers to commonly asked questions concerning NDA violations and subsequent legal actions to pursue available remedies.

Are non disclosure agreements legally binding?

Yes, non disclosure agreements are legally binding contracts that prohibit the sharing of private information by one party to another. Although NDAs are generally enforceable through legal action, a court may not enforce the contents of an NDA if it violates state law or other common law.

Can you go to prison for breaking an NDA?

Penalties for breaking an NDA do not usually involve prison sentences or jail time. Breaking an NDA is known as a breach of contract, which is a civil claim that a wronged party can pursue in court as opposed to a violation of criminal law.

Do non disclosure agreements hold up in court?

The answer to “do NDAs hold up in court” depends on the nature of the protected information, the reason for the NDA, and whether the contract violates applicable Florida State law. An NDA will likely hold up in court so long as it restrictions are not in violation of the geographic or time period limitations.

What kind of behavior might cause an NDA lawsuit?

An NDA lawsuit may arise for any conduct that constitutes a breach of the NDA. Typical conduct may include any kind of written or verbal communication of private information protected under the terms of the agreement. Sometimes, this might include the sharing of trade secrets or business information by a former employee to a competitor. The sharing of protected information in violation of an NDA could be intentional or inadvertent (i.e., negligent).

What are punitive damages for an NDA violation?

Punitive damages are those explicitly stated in a contract as an enforceable remedy for its breach. They differ from non punitive damages which are meant to make a wronged party whole for any breach of contract under principles of equity and fairness in common law. They may include damages for lost business or reimbursement for any legal costs necessary to pursue the claim.

How do you prove damages for the breach of an NDA agreement?

Proving non punitive damages for the breach of an NDA agreement may require evidence of the harm in the form of economic data, financial statements, or other proof. Evidence of changes in value before and after the occurrence of the breaching conduct and testimony from an expert witness could also be helpful in making a case for damages.

Are NDAs a standard part of employment contracts?

Yes, NDAs and other confidentiality obligations are commonly drafted into employment contracts. Business owners understand that their employees may gain access to trade secrets, information about new products, and other valuable data. As a result, employment opportunities are often made conditional on signing an employment contract with NDA terms baked into it.

Cueto Law Group P.L.