Good Business Sense: A Perspective on Confidentiality Agreements
Amid the many news stories about confidentiality issues, we see this topic come up frequently in the business world. Whether you’re training a new employee, working on a new idea, or potentially branching out your business, confidentiality agreements could be a good idea for you. Not only do they cement an understanding between two parties, but they also provide you with protection for your business.
Here is what you need to know about Confidentiality Agreements:
Confidentiality Agreements Go By Many Names
Have you ever heard of a non-disclosure agreement (NDA)? What about a proprietary information agreement (PIA)? Or a confidential disclosure agreement (CDA)? Well, these—in addition to a secrecy agreement—are all names that can apply to a confidentiality agreement. Essentially, they all exist to serve a similar purpose, which is to promise that information being shared between two parties remains private.
Who They Protect Varies
These agreements can be either mutual or unilateral in nature. A mutual confidentiality agreement protects both sides involved. So, if you’re working on a joint venture—like an invention or a merger, it prevents either party from discussing the details with outsiders. A unilateral agreement, however, only obligates one person (usually the signer/receiver) to secrecy. So, if you’re tired of hiring and training new employees, only to have them take your procedures to a competitor after a few months, this could be an invaluable protection for you.
Never Rely on an Oral confidentiality agreement
While some courts do recognize this type of contract, it’s not a universal ruling. Thus, unless you’re familiar with the precedence of your particular jurisdiction, it’s best not to leave it to chance. Additionally, even if the judge does choose to recognize oral agreements in general, you then have to prove that yours exists. Often, this turns into an uphill “he said, she said” battle where your integrity is on trial as much as the other person’s. Fortunately, it’s preventable. You just have to act before you disclose any proprietary information or “trade secrets.”
Confidentiality Agreements Are a Legal Document
While this one seems like an obvious bit of advice, we feel it’s worth repeating. Ultimately, an NDA, or other type of confidentiality agreement exists to protect you and your business’s valuable information. If necessary, this proactive form of defense should extend to the courtroom and cement your ability to reclaim damages should the contract be violated. Thus, you want to make sure it’s ironclad—that it provides the length of protection you expected, on the effective date you needed, with the specific information that’s being secured, and why it warrants such a safeguard. While there are templates available online, if you’re not an experienced legal professional, you may want to reconsider using these. After all, without the proper provisions in place, your confidentiality agreement may not be effective—so what’s the point?
Working with our team at the Law Offices of Kirk Halpin & Associates, P.A., gives you a distinct advantage in the business world since we work with our clients on providing overall strategic advice after reviewing the entire situation. So, often a confidentiality agreement is just one piece of this approach. If we believe it’s a good idea for your business, not only will we draft one uniquely for you, but also we’ll advise you on other steps you can take to expand your protections. We specialize in business, banking, and real estate law, so our experienced attorneys can help you navigate a variety of situations throughout your career. Contact us to see the difference our team can make.