Are NDAs legally binding in Argentina? A guide for employers

Non-disclosure agreements (or NDAs) are a common tool employers all over the world use to protect confidential, proprietary, or sensitive information. But when making global hires, you have to make sure your NDAs are enforceable in different countries and jurisdictions.

That's why employers are asking: Are NDAs enforceable in Argentina? An NDA can help protect your company—and its employees—but it still needs to comply with local laws. Read on to learn more (note: our guide is for informational purposes, and isn’t intended to provide legal advice).

What is an NDA?

An NDA, or Non-Disclosure Agreement, is a legal contract between two or more parties that outlines the confidential information they wish to share with each other while restricting its disclosure to third parties.

The purpose of an NDA is to protect sensitive information and trade secrets from being revealed or used without authorization, ensuring confidentiality and maintaining the competitive advantage of the involved parties.

NDAs are commonly used in various business scenarios, such as when companies share proprietary technology, trade secrets, financial information, customer lists, or other sensitive information with employees, contractors, business partners, or potential investors.

Are NDAs enforceable in Argentina?

The short answer is yes.

In Argentina, NDAs are generally enforceable and recognized by the legal system. There are some best practices you should employ when drafting an NDA—but more on those below.

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Three things you need to know about NDAs in Argentina

1. There are different types of NDA

In Argentina, there are two types of NDAs you're most likely to encounter:

• Mutual NDAs, also known as bilateral or two-way NDAs, are an agreement between two or more parties where each party agrees to protect and keep confidential the proprietary or sensitive information disclosed by the other party. In a mutual NDA, both parties are disclosing and receiving confidential information, and they mutually agree to maintain its confidentiality. A mutual NDA is commonly used when two parties are entering into a business relationship or considering a potential partnership, collaboration, or investment.
• Non-mutual NDAs, also known as unilateral NDAs, are an agreement where only one party discloses confidential information, while the other party receives and agrees to keep that information confidential. Unlike a mutual NDA where both parties are disclosing and receiving confidential information, a non-mutual NDA is one-sided, with only one party disclosing sensitive information. Non-mutual NDAs are common in employee-employer relationships, where the employer is sharing confidential information with an employee or contractor.

2. Confidential information is protected by law in Argentina

In Argentina, confidential information is protected by a variety of laws, including Trade-Related Aspects of Intellectual Property Rights (TRIPs), Argentina's Confidentiality Law, and the Argentine Criminal Code.

These laws state that a person or legal entity can prevent information lawfully within their control from being disclosed to, acquired by, or used by others without their consent.

There are a few conditions that need to be met for confidential information to be protected by the law. It needs to be:

• Secret
• Commercially valuable because it's secret
• The person who legally controls the information needs to have taken reasonable measures to keep it secret

3. Even with legal protections, you need an NDA

While laws exist to protect confidential information in Argentina, they don't specify sanctions for breaking the law. Criminal litigation regarding breaches of confidentiality is rare, and prosecuting someone for a leak can be extremely difficult. For that reason, an NDA can offer additional protection.

As a general rule, an NDA should be as comprehensive and specific as possible, including at least these sections and clauses:

• Clear indication of the parties involved, including their names, roles, who is sharing and receiving confidential information, and who they are sharing such information with.
• Definition of confidential information, including the general topic and scope of information covered by the NDA.
• Exclusions from confidentiality. If there are any cases where parties in the NDA are allowed to share the information it covers, those should be outlined in the agreement.
• Term of the agreement, or how long it lasts. Employment NDAs typically last for the duration of the working relationship, but they can last longer.
• What will happen if the NDA is breached. Because Argentina's confidentiality laws don't specify punishments or legal remedies, this section is key. Outline any injunctions, damages, arbitration proceedings, or other procedures or consequences that will occur if the NDA is breached.

When would an employee or contractor sign an NDA?

The most common time for an employee or contractor to sign an NDA is during their onboarding or when they start a new work contract—before they're given access to any confidential information or materials. A non-disclosure clause may be included in their offer letter or employment contract.

Frequently asked questions about NDAs in Argentina

Are NDAs enforceable in Argentina?

Yes. NDAs are legally binding contracts in Argentina and have been upheld by Argentine courts.

Are NDAs enforceable overseas?

The enforceability of NDAs from Argentina in other countries depends on many factors, including the specific laws and regulations of the countries involved, any international agreements or treaties that may apply, differences in legal systems and public policy, and the circumstances surrounding the NDA.

To ensure the enforceability of an NDA from Argentina in another country, global employers consult with legal professionals in both jurisdictions who have expertise in international contracts and the applicable laws. They can provide guidance on drafting the NDA, navigating potential conflicts of laws, and understanding the enforceability of the agreement in the desired jurisdiction(s).

What information can be covered by an NDA?

The type of information that can be covered by an NDA is varied—but as a general rule, it needs to be proprietary or confidential information for the NDA to be upheld. Here are some examples of information commonly covered by NDAs:

• Trade secrets and proprietary information, which can include designs, formulas, manufacturing processes, unique technology developed by a company, and any other information that helps the business maintain a competitive advantage.
• Financial information, which can include budgets, projections, and sales figures.
• Customer information, including contact information, purchase histories, and other customer data.
• Employee information, including their salaries, job duties, contact information, job performance, and other personal data.
• Intellectual property, which can include patents, trademarks, copyrights, and any other IP owned by a company.

It's important to note that some information cannot be covered by an NDA—for example, employers can't prevent employees from disclosing their own personal data. And whistleblower information and information that's requested by a court order or that could have major implications (for example, national security risks) may be exempt to prevent employers from using NDAs to cover up illegal activity.

When should you use an NDA?

Common situations to use an NDA in Argentina include:

• When entering into a partnership or collaboration with another company
• When beginning an employment relationship or work contract with an employee or contractor
• When outsourcing certain tasks or projects to third-party service providers
• When presenting business plans, financial projections, proprietary technology, or other confidential information to potential investors or venture capital firms
• During negotiations for mergers, acquisitions, or other business transactions
• When multiple parties engage in joint research or development projects

Is an NDA the same as a confidentiality agreement?

Yes. Non-disclosure agreements may also be called confidentiality agreements (CAs), confidential disclosure agreements (CDAs), proprietary information agreements (PIAs), or secrecy agreements (SAs).

Is an NDA the same as a non-compete agreement?

No, an NDA and a non-compete agreement are not the same, although they may be included as separate provisions within a broader contract.

An NDA is a contract that establishes confidentiality obligations between parties. It aims to protect sensitive or confidential information from being disclosed or used by unauthorized individuals or entities. The NDA typically outlines what constitutes confidential information, the purpose for which it can be used, the duration of the agreement, and the consequences of breaching the agreement.

A non-compete agreement, also known as a covenant not to compete or a restrictive covenant, is a contract provision that restricts an individual or party from engaging in competitive activities within a specified time period or geographical area. Non-compete agreements are generally used to prevent employees, consultants, or business partners from competing directly with the company they have a relationship with during or after their association.

Enforceability and specific requirements of NDAs and non-compete agreements can vary by jurisdiction, as they are governed by local laws and regulations.

Is an NDA ethical?

The ethics of NDAs can be subjective and depend on the specific context and how they are used. While NDAs serve legitimate purposes in protecting sensitive information, there are ethical considerations to be mindful of.

One consideration that has been in headlines around the world in recent years is how an NDA can restrict individuals from disclosing information that could be in the public interest, such as evidence of illegal activities, health and safety concerns, or other unethical practices. Balancing the need for confidentiality and the public's right to know is a complex ethical consideration. Some countries are moving to limit NDAs in certain cases, like as part of a settlement in a case of harassment, discrimination, or abuse.

Benefits of NDAs in Argentina

NDAs do have many legitimate benefits, including:

• Protection of confidential information. An NDA establishes a legal framework for protecting confidential information. It ensures that sensitive business information, trade secrets, proprietary technology, customer data, or other valuable data shared with third parties remains confidential and cannot be disclosed or used without authorization.
• Trust and confidence. By implementing an NDA, parties can build trust and confidence in their business relationships. The agreement assures the disclosing party that their confidential information will be treated with the utmost care and will not be misused or disclosed to unauthorized individuals or competitors.
• Legal recourse and remedies. An NDA provides a basis for legal recourse and remedies in case of a breach. If a party violates the confidentiality obligations outlined in the NDA, the injured party can seek legal remedies, such as injunctive relief, monetary damages, or specific performance, to enforce the agreement and mitigate any harm caused.
• Competitive advantage. By protecting sensitive information, an NDA helps maintain a competitive advantage in the marketplace. It allows businesses to share proprietary knowledge, marketing strategies, research and development findings, or other confidential information with partners, investors, or employees, knowing that their competitive edge will be safeguarded.
• Intellectual property protection. NDAs play a crucial role in safeguarding intellectual property rights. By defining what constitutes confidential information and the obligations surrounding its protection, an NDA can help prevent unauthorized use, disclosure, or appropriation of intellectual property assets.

What happens if an NDA is breached?

When an NDA is breached in Argentina, the consequences and legal remedies available will depend on the specific terms of the NDA, the nature of the breach, and the applicable laws. Argentine courts have historically upheld NDAs as legally binding contracts, which means the violating party could face legal action or be found responsible for any damages resulting from the breach.

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Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.