Employment contracts serve many purposes, and one of the most important is ensuring that trade secrets and the internal workings of a company remain private. To accomplish this goal, many employment contracts contain confidentiality agreements, or non-disclosure agreements (NDAs).  If your organization has proprietary information, intellectual property, business strategies, or financial data that could damage your profits or reputation if made public, then incorporating these elements into the contracts you ask key personnel to sign is essential.

Though NDAs have been on the receiving end of some bad publicity recently, they can serve a positive purpose for employers and employees alike. One of the advantages of including confidentiality clauses in an employment contract is the establishment of trust. The employer is trusting the employee with their most sensitive internal information in exchange for their promise not to divulge it during or after their period of employment. Of course, the document also protects the employer by providing them with legal recourse in case the employee breaches the trust that they’ve given them.

As is true of any type of contract, confidentiality agreements need to be crafted in a way that removes all questions and is clear in both the expectations that the employer has of the employee and what the redress will be for violations. This means the definition of what is confidential needs to be clearly provided, and the same is true for the duration of the employee’s obligation to adhere to its terms. The more vague or overly broad language is included, the lower the likelihood that a court will find that its terms are enforceable in case of a dispute.

Confidentiality agreements need to be written with great skill and care, as they must protect both the employer’s and the employee’s rights. They also need to include the provision of something of value – known as consideration – in exchange for the employee’s agreement. Though this may be the offer of employment itself, circumstances may lead to the consideration being a bonus, a promotion, or some other benefit.

If your organization already has confidentiality agreements included in your employment contract but it’s been a while since they were first created, it may be time for an update to reflect changes in legal views about reasonableness and what is and is not permitted by law. Whether you need a review, new agreements crafted, or representation in a confidentiality agreement dispute, contact us today to learn more about putting our experience and knowledge to work for you.