A breach of a confidentiality agreement may arise when a person discloses information that they have agreed to keep private. Confidentiality agreements are typically used in an employment setting when the hiring company doesn’t want confidential business information leaked into the public. As such, they will usually require employers to sign a confidentiality agreement stating that they won’t disclose certain specified points of information.
Confidentiality agreements may be included in the person’s employment contract, or they may be signed as a separate agreement later on as required. Some examples of breaches of confidentiality agreements may include:
- Publishing confidential information in a written document, newspaper, online article, or other such publication.
- Orally disclosing the information to another person.
- Revealing the information through non-verbal communication.
- Showing other persons a product or item that is not intended to be seen yet.
- Providing information for formulas, recipes, construction plans, and other instructions for production.
Business confidentiality agreements may also involve some crossover with intellectual property laws, especially for products or information that is protected by copyright or patent laws.
In most cases, enforcing a confidentiality agreement may involve a monetary damages award. This is paid by the non-breaching party, and is intended to reimburse the other party for any losses caused by the breach. In some instances, this can result in much financial loss which will need to be covered by the party in fault.
For instance, suppose that an employee breached an agreement by leaking out information regarding the company’s upcoming product release. If a competitor company is able to copy the product and release their own, the employee may be responsible for the losses. The damages must of course be proven by the court.
Also, other remedies can apply, such as firing or replacing the employee; requiring the employee to return any company information or products that they have; or subjecting the employee to disciplinary measures.
Since confidentiality agreements are treated like contracts, various breach of contract defenses can apply in some cases. For instance, the defense of unclean hands may apply. This is where the plaintiff has actually engaged in the same type of conduct as the breaching party, which would then disqualify them for obtaining a remedy from court. Various other contract remedies may apply depending on the facts of the case
Confidentiality agreements are very important documents, but they can often lead to complex legal disputes. You may need to hire a lawyer if you need help with a breach of confidentiality claim. Your business attorney can provide you with the legal advice and guidance that is needed to succeed on your claim. Also, your lawyer will be able to inform you of any changes in the area of confidentiality laws.