Non-Disclosure Agreements (NDAs)

What Is an NDA?

A non-disclosure agreement (NDA), sometimes referred to as a confidentiality agreement, is a legally binding contract that prohibits employees, contractors, or third parties from sharing or misusing confidential information.

Ontario employers commonly use NDAs to:

• Protect proprietary business information and trade secrets
• Prevent the unauthorized disclosure of client or customer data
• Safeguard internal processes, technologies, and business negotiations
• Establish clear terms during terminations, severance discussions, or settlements

NDAs can be structured as standalone documents or integrated into broader employment agreements.

Are NDAs Enforceable in Ontario?

Yes. Non-disclosure agreements are enforceable in Ontario if properly drafted.

Courts will consider the following:

• Whether the information qualifies as confidential
• Whether the NDA clearly defines what is being protected
• Whether the agreement is not overly broad in scope
• Whether the NDA complies with public policy (e.g., it does not restrict whistleblowing or legal reporting), and whether there is proper consideration for something of value exchanged for entering into the agreement

An NDA that is vague, overly broad, or unfair may be deemed unenforceable by the courts.

Ontario courts have emphasized that contractual clauses must be clear, lawful, and reasonably limited in scope. Overly broad or unclear NDAs may be struck down in whole or in part, especially where they lack proper consideration or attempt to restrict lawful disclosures.

Many employers unknowingly weaken their legal position by using outdated or generic NDAs. Common issues include failure to define what constitutes “confidential information,” overly broad or indefinite obligations, lack of exceptions for legally required disclosures, and clauses that attempt to cover non-confidential or publicly available information.