By Bryan Tyson
We love it when celebrity life crosses paths with law life. And in the latest installment of this, a recent news report claims that Kanye West’s apparel company, Yeezy, has filed suit against a former intern for allegedly breaching a non-disclosure agreement by posting photos of the company’s merchandise on Instagram. The news report states that the company seeks damages of $500,000 against the former intern for the alleged breach.
So, if Kanye is attempting to enforce non-disclosure agreements against former employees, do you need to be doing this also? Perhaps.
First, though, let’s unpack what appears to be going on here and why this might be important to your (and Kanye’s) businesses.
What is a non-disclosure agreement? A non-disclosure agreement is an agreement with an employee or contractor that prevents the person from disclosing specific confidential business or trade secret information that the employee/independent contractor may learn or have access to because of his/her employment or work for your company. Keep in mind that a non-disclosure agreement could apply to a third-party vendor (for example, a company that manufactures or supplies products to your company).
Why would you need this? In Kanye’s case, the article says that the intern shared “non-public” images of merchandise. That might matter to the apparel company because they could have been planning an essential new release and marketing campaign for clothing or shoes. Having that prematurely released or presented in a way inconsistent with the brand could hurt its value and potential sales.
Which raises the more important point: does your business have something that, if known by your competitors, could cause you to lose customers? Is there a business method or marketing strategy you want or need to keep confidential to ensure you maintain your market share or ability to deliver more efficient products/services? If so, you might need to consider whether you want to protect that with a non-disclosure agreement.
Won’t North Carolina law protect my confidential business information without a non-disclosure agreement? Maybe. The North Carolina Trade Secrets Act provides protections for “trade secrets.” However, what if your information/business methods provide you substantial value but, don’t rise to the level of being a “trade secret” under North Carolina law? That’s where having the non-disclosure agreement could be critical to business survival.
Is this different than a non-competition agreement? Yes. Oftentimes non-disclosure and non-competition agreements may be included together in one document, but technically they are there for different reasons. A non-competition agreement usually prohibits someone from competing against you for a period of time in a specific location. A non-disclosure agreement often lasts longer—sometimes forever—and prohibits the person from disclosing or using confidential business information or trade secrets. Both provisions can be critical tools to ensure that former employees, third parties, or vendors don’t unfairly compete or take valuable business information that would harm your company.
Do you need this? It’s very possible, especially if you have valuable confidential business information or trade secrets that employees or third parties can access through their work for your business. Having a non-disclosure agreement can allow you to protect that information swiftly and efficiently, just like Kanye. If you have any questions about non-disclosure agreements, feel free to reach out.
Also, stay tuned for an upcoming episode of our podcast “Protect What’s Yours,” where Attorneys Matthew Marcellino and Bryan Tyson will discuss non-competition and non-disclosure agreements from both the employee and employer perspective.