If you’re hiring in the Republic of the Philippines (or anywhere else globally), you’re likely curious about guardrails for protecting sensitive information. Employers often rely on non-disclosure agreements (or NDAs) to ensure the confidentiality of trade secrets and other proprietary information—both during an employee’s tenure and after they’ve taken on a new role elsewhere.
But in the Philippines, an NDA won’t always withstand regulatory scrutiny.
Read on to learn how NDAs are used in the Philippines, whether they’re legally enforceable, and the most important components a Philippine NDA should have to ensure your global workforce’s information is protected.
A non-disclosure agreement (NDA) is a legal contract that prohibits one or more parties from sharing confidential information with third-party people or entities.
In the Philippines, NDAs are often used to protect a company’s confidential information outside of the workplace and after an employee leaves and finds a new employer, including:
NDAs are legally binding in the Philippines, so long as they comply with provisions in the country’s Civil Code, Intellectual Property Code, and Electronic Commerce Act.
Yes, NDAs are enforceable by Philippine courts. To ensure a confidentiality agreement holds up to legal scrutiny, it should include the full names of the consenting parties, a thorough definition of the information that can’t be disclosed, situations where the NDA is nullified, and provisions for maintaining confidentiality after an employee is terminated.
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In the Philippines, there are two types of NDAs you're most likely to encounter:
These are the things that an NDA should include to be comprehensive and enforceable:
Philippine authorities may negate the terms of an NDA. In early 2023, for instance, the Senate Blue Ribbon Committee got COVID-19 vaccine manufacturers to disclose price information originally protected in an NDA, in order to curb waste.
NDAs also won’t exempt employers from criminal activity or workplace misconduct.
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It's common for employees and contractors in the Philippines to sign NDAs during their onboarding process or when they start a new work contract. An NDA may also be included as a confidentiality clause in a new hire's offer letter or employment contract.
By law, an NDA is considered a legally binding contract in the Philippines. Courts have historically upheld them as enforceable legal documents so long as they comply with other laws of the Philippines.
However, it's important to note that employment laws and other regulations that affect NDAs can change.
The enforceability of a non-disclosure agreement (NDA) in the Philippines overseas depends on the specific terms of the agreement, as well as the laws of the country where the NDA is being enforced.
In general, an NDA that is valid and enforceable in the Philippines may also be enforceable overseas, particularly in countries that recognize and enforce foreign judgments. However, there are many factors that can affect the enforceability of an NDA in a foreign jurisdiction, such as differences in legal systems, cultural norms, and public policy considerations.
In the Philippines, information that's considered confidential or proprietary can be covered by an NDA. This includes:
Any information that's publicly known or part of the public domain cannot be covered by an NDA. You can also generally disclose confidential information to police authorities and in court.
Common situations to use an NDA in the Philippines include:
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Yes. Non-disclosure agreements may also be called confidentiality agreements (CAs), confidential disclosure agreements (CDAs), proprietary information agreements (PIAs), or secret agreements (SAs).
No. An NDA is different from a non-compete clause or non-solicitation agreement. While both types of agreements are used to protect a company's interests, they serve different purposes.
A non-compete agreement is a contractual agreement between an employer and an employee that restricts the employee from engaging in certain competitive activities for a specified period of time after leaving the company or being terminated.
The purpose of a non-compete agreement is to prevent a former employee from taking knowledge, skills, and business opportunities acquired during employment and using them to compete with your company.
An NDA can help protect employers' confidential information and proprietary assets, which can be crucial to a company's success in today's highly competitive business environment. Benefits include:
The penalties for breaching an NDA can vary, depending on the severity of the breach, what penalties are outlined in the NDA, and whether the breach violated any laws. But an NDA is a legally binding contract, so any breach means legal action can be taken against the violating party. The NDA should have a "breach of this agreement” clause that outlines expected consequences.
In the Philippines, it’s important to follow due process when trying to enforce an NDA via the court system. Before filing a complaint, make sure you have strong evidence that an NDA was violated, and make sure you give the receiving party a detailed explanation of why you thought their actions constituted an involuntary disclosure.
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