Many business require employees to sign confidentiality agreements to protect trade secrets and other information learned while working there. These agreements are typically enforceable, however some states require the agreements to be very specific regarding what information is protected and refuse to enforce agreements that are too broad.
There are several issues that determine whether a confidentiality agreement is enforceable:
- Like any other contract, confidentiality agreements require consideration to be valid, which means that the employee must receive something in exchange for his promise. When the contract is made at the time of hire, the job can serve as this consideration. However, if the agreement is made during employment, something is needed from the employer to serve as consideration.
- Most courts require any confidentiality agreement to be “reasonable.” To determine reasonableness, courts will look at issues such as:
- the interests of the employer in keeping the information secret
- the time the information must be kept secret
- the burden on the employee, and
- the interests of the public
- Most confidentiality agreements also include exceptions for information the employees already knew, materials already generally available to the public, and materials obtained illegally.
- Confidentiality agreements also may not be enforceable against a subpoena.
The laws regarding confidetiality agreements can differ from state to state and be very complex. An experienced contract attorney can help you determine your rights under a confidentiality agreement or help you create an enforceable agreement. A lawyer can also help you obtain a remedy if your agreement has been breached and represent you in court.