Confidentiality agreements, also referred to as non-disclosure agreements (NDAs), can help protect the viability of your business. Essentially, these agreements are written contracts that prohibit employees and independent contractors from sharing your company’s trade secrets along with other protected business information.
All employers must take great care when crafting these type of agreements, as even minor mistakes can render them unenforceable. Your company’s confidentiality agreements should always be drafted and reviewed by a qualified business law attorney.
Key Elements That Should Be Included in Your Company’s Confidentiality Agreements
If a dispute arises over a confidentiality agreement, businesses should expect the courts to take a very careful look at the enforceability of the agreement. Most courts are wary of overly restrictive confidentiality agreements. In fact, a sloppy agreement could cost your company its legal protections. This makes it especially important to ensure that all NDAs are drafted properly. Specifically, each NDA should include the following elements:
- The confidential information that is protected by the agreement must be well defined. Confidentiality agreements with general ‘catch all’ language run the risk of being found unenforceable.
- There should be a statement of purpose as to why confidential information needs to be protected. Without a clearly articulated purpose, a court may find the agreement too restrictive or too vague to be enforced.
- The obligations of the signing employees or contractors should be carefully explained. This includes specification of the following: how signing parties must protect confidential information; how these parties must limit their use of the protected information; and whether or not confidential documents should be returned or destroyed.
- The agreement should have a clear duration.
- The agreement should outline the remedies in the case that a violation occurs.
Confidentiality Agreement Violations: Defenses
There are four common defenses to the violation of a confidentiality agreement:
- The information had no value.
- The information was already public knowledge.
- The information was not adequately protected by the company.
- The confidentiality agreement itself was improperly crafted and is therefore void.
As was mentioned, a properly crafted agreement should include all necessary elements. This will help ensure that your company’s agreements are fully enforceable. Beyond that, it is also critical that your company takes proactive steps to protect confidential information. If a court determines that the information was not being adequately protected, then the court may find the fact that a former employee breached part of their agreement to be irrelevant.
Do You Need Legal Assistance?
If your company needs assistance in drafting enforceable confidentiality agreements, or if your business has already been damaged by the violation of a confidentiality agreement, our experienced business attorneys are ready to help. Contact a contract lawyer Ridgefield, CT relies on today to set up a confidential review of your case.
Thank you to our friends and contributors at Sweeney Legal for their insight into business law and contracts.