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Not all companies and corporations consider themselves to be in the business of keeping secrets, but nearly all benefit from the trade secrets they keep. A trade secret is a valuable intellectual property (IP) that helps a business operate, stay ahead of the competition, and keep its plans from public view. Trade secrets can include, among other things, business methods, financial information, formulas, marketing data, and customer profiles. If such trade secrets fell into the hands of the competition, your business might experience heavy losses while your competitors took advantage and benefited.
While it is crucial that businesses large and small protect their trade secrets, those businesses must often divulge such information to certain employees, partners, contractors, and suppliers. So, what is a business owner to do? Confidentiality agreements are among the most surefire ways of keeping trade secrets held close and well-guarded. A confidentiality agreement (also known as a non-disclosure agreement (NDA), a proprietary information agreement (PIA), or a confidential disclosure agreement (CDA)) can be included in a business or employment contract. These contract clauses can help protect your trade secrets from getting out now. At the same time, your employees and partners remain involved with your business and into the future after those business relations have been terminated.
Restrictive covenants like NDAs and other confidentiality agreements can be challenging to enforce. The courts must consider them reasonable and be worded carefully to ensure they are legally enforceable. It is strongly recommended that you work with business law attorneys when drafting employment contracts with confidentiality agreements. Your business law lawyers can help ensure that the business agreements are airtight so that no former employees or business partners can seek to take advantage of the agreement and tell your secrets to the world. If you want to draft an employment contract with a confidentiality agreement, contact our law firm to work with our experienced legal team. We would be proud to assist you.
What Are the Different Types of Confidentiality Agreements?
There are several types of confidentiality agreements, and not every such agreement suits every business situation. Be sure to speak with a lawyer to understand how different confidentiality agreements benefit you and help you achieve your goals.
Examples of different kinds of confidentiality agreements include the following:
- Company-contractor confidentiality agreements.
- Employer-employee NDAs.
- Inventor-evaluator NDAs.
- Merger and acquisition (M&A) confidentiality agreements.
- Mutual confidentiality agreements (sometimes known as multilateral or bilateral NDAs).
- Seller-buyer NDAs.
- Unilateral confidentiality agreements (sometimes known as one-sided NDAs).
When you consult with professional legal counsel, they will have a better idea of what type of confidentiality agreement is most well-suited to your situation. Contact our Central Florida law firm to schedule your initial consultation today.
Why is it Necessary to Include a Written Confidentiality Agreement in Your Employee Contracts?
The confidentiality agreement your company enters with another party must be established in writing and not just agreed upon with a handshake.
Perhaps most importantly, a written non-disclosure agreement helps avoid confusion by clearly stating what should remain confidential. It also defines confidentiality and what it expects from the parties signing the business contract.
Enforcing written contracts is much easier than enforcing verbal agreements. Do not leave it up to chance. Put it down in writing with the help of an attorney who has experience writing successful confidentiality agreements.
State laws can sometimes more narrowly define what is and is not considered a trade secret. While some matters may be difficult to enforce in a court of law, it is better to put it in writing to establish what you expect from the signee.
What Are the Limitations of a Confidentiality Agreement?
While encouraged and, in some cases, a necessary part of doing business, confidentiality agreements have limitations.
Proving a violation of a confidentiality agreement can be an uphill battle. That’s why having an experienced lawyer write the legal documents is so important.
Once trade secrets and business information are unlawfully leaked to a public-facing forum, that information cannot be undisclosed. You can’t put the genie back in the bottle, as it were.
While there may be remedies for a breach of confidentiality, many parties believe the damages to be inadequate to the losses they’ve endured.
What Are Potential Remedies for the Violation of a Confidentiality Agreement?
There are several potential remedies for situations where a party breaches their confidentiality agreement.
An injunction can be issued if a former business partner or employee is threatening to reveal trade secrets. Injunctions can prevent the sharing confidential information and, where applicable, enforce the destruction or return of said intellectual property. An injunction can be issued after the reveal of sensitive business information, but at that point, the damage may already be done, and other remedies may be in order.
Damages can be awarded to your business if you suffer financial losses due to the unpermitted divulging of trade secrets. An alternative is for a claimant to demand an accounting of the profits gained by the offending party and claim those profits as their own.
Contact Lankford Law Firm to Schedule an In-Depth Case Review
Confidentiality agreements are a vital part of protecting your trade secrets and, in turn, safeguarding your business’s future standing in your chosen industry. These business agreements can be difficult to craft, and it is wise to include the involvement of lawyers with extensive experience in such matters. The Lankford Law Firm has that experience, so you’ve come to the right place.
Our law firm may be small, but we view that as a strength. Our size allows us to provide more personal, efficient, and cost-effective legal representation to our clients and their businesses. To learn more about our legal services, please contact us at 850-888-8992.
