When you hire an employee—especially in a different country, like Colombia—you'll likely want them to sign a non-disclosure agreement (or NDA) to protect your sensitive company information. NDAs are by no means new, but in recent years, the rules around them are changing as many countries are seeing a push to prevent them from being used to silence whistleblowers and victims of workplace abuse and harassment.
In light of this, many employers are wondering when and where NDAs are enforceable. Can you ask Colombian employees to sign an NDA? How can you protect your company, its confidential information, and its global employees? Read on to learn more.
What is an NDA?
NDA stands for "non-disclosure agreement". It's a legally binding contract that establishes a confidential relationship between two parties. The party who signs the agreement agrees to keep certain information shared by the disclosing party confidential and not to disclose it to third parties without the proper consent.
NDAs are commonly used in many business settings, such as between employers and employees, between businesses and contractors, and during discussions of sales or mergers. They are meant to protect trade secrets, business strategies, customer lists, and other types of proprietary information. The violation of an NDA can lead to legal consequences including monetary damages, injunctions, arbitration, and other legal actions and sanctions.
Are NDAs enforceable in Colombia?
The short answer is yes—NDAs are generally enforceable in Colombia. Colombian law recognizes freedom of contract, which allows parties to create agreements as they see fit, as long as those agreements are not contrary to law, public order, or good customs.
An NDA, like any other contract, must have the basic elements of a contract to be valid and enforceable. These elements include the agreement itself (offer and acceptance), a lawful purpose, and lawful consideration.
However, the effectiveness of an NDA can depend on several factors, including its specific terms and conditions, how well it's drafted, and the nature of the information being protected. Furthermore, the legal landscape can change and legal interpretation may vary. It's always advisable to consult with a legal professional knowledgeable in local law to get the most current, accurate information and advice.
You can generate NDAs, offer letters, and any other documents you need, then easily send them out for e-signature—all through Rippling.
Note: our guide is for informational purposes, and isn’t intended to provide legal advice.
Three things you need to know about NDAs in Colombia
1. Trade secrets are protected by law in Colombia
There are a number of Colombian laws that protect trade secrets: Decision 486 of 2000 of the Andean Community of Nations, Common Regime on Industrial Property; Law 256 of 1996 relating to unfair competition; and Criminal Code, articles 258, 308, 418, 419 and 429.
Under applicable law, trade secrets are defined as any type of information that:
- Is under the rightful control of a person or a company
- Can be used in making things, business activities, or sales
- Can be shared with someone else
But, for this information to be a trade secret, it needs to meet a few conditions:
- It must actually be a secret. This means it isn't something that the general public or people who normally work with this kind of information would easily know or could easily find out.
- The secret must have some value in business because it's a secret.
- The person or company in control of this information has made reasonable efforts to keep it a secret.
A trade secret could be about the details or uses of products, the way products are made or services are provided, or how goods are sold or services are delivered.
2. You still need an NDA to protect your company's confidential information
Despite governing law protecting company trade secrets, you should still have employees sign an NDA. Colombian labor laws don't have any explicit rules about trade secrets, so it's best practice for companies operating in Colombia (or hiring Colombian employees) to have their own rules that focus on keeping sensitive information safe.
This can be done by including strict confidentiality rules and agreements in employment contracts. Employers should also teach their employees about what trade secrets are, how they should be handled, and what could happen if they are misused.
3. Treaties offer ways to enforce international NDAs in Colombia
Enforcement, particularly international enforcement, of an NDA can be complex and might require litigation or arbitration, and the recognition and enforcement of foreign judgments or arbitral awards. These matters involve both the law of the contract (which might be Colombian law, or another law chosen by the parties) and the law of the place where enforcement is sought.
Colombia is part of several international treaties relating to the recognition and enforcement of foreign arbitral awards, such as the New York Convention (1958), which facilitates the international enforcement of such awards. As a result, arbitration can be a useful dispute resolution mechanism in the context of international NDAs.
When would an employee or contractor sign an NDA?
In Colombia, as in many other countries, an employee or contractor might sign a non-disclosure agreement in various situations, often related to the handling of confidential or proprietary information. Here are some examples:
- At the start of employment or contract: This is probably the most common scenario. The NDA is typically part of the initial package of employment or contract documents. An NDA may also be included as a confidentiality clause in a new hire's offer letter or employment agreement.
- During a specific project: If an employee or contractor is assigned to a specific project that involves sensitive information, they may be asked to sign an NDA specifically for that project.
- When gaining access to confidential information: If an employee's role changes, or if a contractor is given new duties that involve access to confidential information, they may be asked to sign an NDA.
- At the end of employment or contract: Sometimes, an NDA is signed when an employment or contractual relationship is ending. This is to ensure that the departing employee or contractor will continue to maintain the confidentiality of the information they had access to during their tenure.
Frequently asked questions about NDAs in Colombia
Are NDAs enforceable in Colombia?
Yes. NDAs are generally considered enforceable in Colombia as long as they meet the requirements outlined above.
Are NDAs enforceable overseas?
This can depend on a lot of factors: the specific terms of the NDA, the laws of the country where it's being enforced, and more.
As a general rule, a cross-border NDA that's valid and enforceable in Colombia will be valid and enforceable in other countries, too—especially if they have governments and legal systems that recognize and enforce judgments by the Colombian government and legal system. But keep in mind that this can be affected by different legal systems, cultural norms, public policies, and more.
What information can be covered by an NDA?
In Colombia, NDAs are most commonly used to protect trade secrets, which are defined by law as information that:
- Is under the rightful control of a person or company
- Can be used in making things, business activities, or sales
- Can be shared with someone else, but has been kept secret
- Has business value because it's been kept secret
- The person or business in control of it has made reasonable efforts to keep it secret
Generally, the following types of information can be covered by an NDA:
- Manufacturing processes
- Financial information
- Customer information
- Employee information
- Intellectual property rights, including patents, trademarks, copyrights, etc.
Rippling makes it simple to create and send out an NDA as part of a job offer package.
Is an NDA the same as a confidentiality agreement?
Yes. Non-disclosure agreements, NDAs, and confidentiality agreements are all the same thing.
Is an NDA the same as a non-compete agreement?
No. A non-compete agreement prohibits an employee from engaging in activities that could be considered competition, such as taking a job at one of your competitors, for a certain amount of time.
In Colombia, non-compete clauses are not considered valid or enforceable under virtually any circumstances.
An NDA is different from a non-compete or non-solicitation agreement. While both of these agreements are meant to protect a company's interests, they have different purposes—and only one is legal in Colombia.
Benefits of confidentiality in Colombia
The main benefit of an NDA is that it protects confidential business information, IP, and other proprietary assets—especially if this information becoming public could harm the business.
But NDAs have other benefits, too. For example, they provide specific legal recourse and legal protection, should an employee or another party breach an NDA (more on that below).
What happens if an NDA is breached?
Colombian law doesn't outline any specific penalties for when one party in an NDA doesn't uphold their confidentiality obligations. This would be considered a breach of contract under Colombian law, and the aggrieved party could seek legal recourse and damages, including financial restitution.
It's a good idea when writing your NDA to include a clause on what happens if it's breached: arbitration, fines, or other penalties.
Run your global workforce in Colombia with Rippling
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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.