Nondisclosure agreements can stop intellectual property from walking out the door with departing employees, but only if companies draft them correctly.

In an attempt to cover all of a company's confidential bases, NDA drafts can be overly broad, using language that may not hold up in courts of states such as California and New York, where employees legally can't be stopped from things like discussing their salary with colleagues.

“As an employer, you're asking, 'What is it that I'm really wanting to protect?' and avoiding a situation where you really have an over broad agreement. Because an over broad agreement may be as useful as having no agreement at all if it's something that a court won't enforce,” said Sara Kula, a partner at DelBello Donnellan Weingarten Wise & Wiederkehr and head of the firm's employment practice group.

Michael Henry, the principal and founding member of IP-focused Henry Patent Law Firm, said companies should decide what type of information they want an NDA to apply to and define what the NDA applies to in a way that isn't overly broad.

“Make sure that the confidential information that's defined in the NDA is related to the employee's employment and [covers] stuff that is actually considered confidential by the company,” Henry advised.

It's also good to mark confidential information as confidential during an employee's time at the company, Henry said, so that they're not left to guess whether or not the NDA applies. He cautioned, however, that the mark of confidentiality should fall within reason—if a document is widely distributed or is publicly available information, the confidential stamp won't stop a court from deciding it falls outside of the NDA.

But it isn't just important to define what current and former employees can't speak about. Kula said a good NDA should also let employees know what they can speak about, especially when it comes to workers' rights. In the era of #MeToo, NDAs have faced scrutiny as a potential tool to keep employees from speaking out against harassment in the workplace or gender pay inequity.

“When drafting a nondisclosure agreement, there are exceptions built in to the disclosure limitations … there's going to be an exception for any disclosures required by law … so I always put in specific language to indicate that nothing in the agreement is meant to restrict or impede the employee from discussing these types of terms and conditioning of employment,” Kula said. 

When it comes to another NDA concern, stifling employee creativity, Kula noted it's important to develop a company culture that rewards and encourages innovation from employees. Employees also can lay out whether or not they've invented something or produced an idea prior to joining a company during intake, so it's clear who has ownership.

On an employee's way out, Henry said companies should sit down and ensure confidential information has been destroyed or returned.

“One of the things smart tech companies will do as someone is departing, they'll have an exit interview to remind them of their obligations, and sometimes you can go so far as to call their new employer to make sure the new employer knows that this person has confidential information of your company,” Henry said.