If your business or organization has confidential or proprietary information that you need to protect, an employee confidentiality agreement can help preserve the integrity of your data. Whether you want to protect proprietary processes, your internal methods, or even your sales and prospect lists, a confidentiality agreement can help.
When you have data and methods that you need to protect, this legal document can be used to ensure that your team does not disclose your proprietary information to others. Competitors, hackers, and even unrelated businesses could seek to copy your processes, use your data, or steal the methodology you have worked so hard to create and implement. An employee confidentiality agreement is an added protection that preserves your information and prevents your employees from spilling your secrets to the competition. While an employee confidentiality agreement is used for your workers, a similar document can be used for independent contractors; the format, information, and protections offered are the same, only the audience differs.
You can tailor your employee confidentiality agreement to meet your specific needs. In general, an effective legal document of this type would be used to protect any or all of the following information:
Be specific about what you want to protect; an overly broad or blanket agreement is not as enforceable as a specific, detailed one. Determine which information is most precious to your brand and which pieces of data would be most harmful if released or shared with a competitor. These are the items that need to be protected by your confidentiality agreement.
Each agreement is unique, but in most cases the information covered by the agreement is protected until it becomes common knowledge or is made public. The employee can also be released from their obligation by the company, or you can specify a specific timeline and detail what actions will be taken if the agreement is breached before its end date.
Your confidentiality agreement needs to be detailed and specific, but it does not need to be an overly complex, lengthy piece packed with jargon. Including the following key elements can help to protect your organization and ensure that both parties understand what is expected:
It is tempting to cover everything in your confidentiality agreement, but it is not a good idea. Specifically detailing what pieces are covered ensures your most precious data is included. Overbroad confidentiality agreements may not be enforceable at all, so being specific and detailed is the best way to protect your brand and ensure that you can enforce the agreement if you must.
Your existing employees will often be covered by this form of agreement, but new hires or someone in the candidacy process who may need to see proprietary information could be covered as well. Some organizations use confidentiality agreements to protect themselves when hiring upper-level management candidates.
A consultant, independent contractor, or even vendor could be asked to sign a confidentiality agreement as well. This new document would not be called an employee confidentiality agreement since these individuals are not employees, but the core information and details would be very similar.
You could choose to have every employee sign an agreement at the time of hire, but what about your existing employees? In some cases, asking existing employees can be tricky; they can see it as an indication that you do not trust them or that their position is not secure. If you decide to have all existing team members sign confidentiality agreements, proceed with caution and be aware that some employees could object or feel badly about being asked to sign.
Stressing that it is simply a new company-wide policy to protect the organization (and indirectly, their jobs) and that everyone is being asked to sign can help. The team will know they are not being singled out and will understand that everyone is being asked to conform to the new policy.
Some employers roll out confidentiality agreements for individual employees at the same time as annual performance reviews or when other perks are happening to prevent any ill will. If there is a raise, bonus, or promotion happening, you can add the confidentiality agreement at the same time and be sure it is well received.
Note: In some states, you cannot fire an existing employee if they refuse to sign a confidentiality agreement. Proceed with caution if you are in this situation and consult with an attorney before taking any action if you have an employee who refuses to sign.
Follow these best practices to ensure your employee confidentiality agreement is truly able to protect your organization and, if the worst happens, that it is enforceable.
What happens if someone breaches your agreement? Well, it depends on the conditions you have included and how far you are willing to go to enforce it. You should consider your options before you create your employee confidentiality agreement so you have a clear path to follow.
Even if you do not win, your other employees will be aware of the extent that you will go to to protect your data and enforce your agreement.
An employee confidentiality agreement can protect your interests and clearly outline the information you most need to keep secure. Used with new and existing employees, this agreement can help you maintain confidentiality and give you a way of responding if your private data or proprietary information is leaked. This document does have to be specific, but it does not have to be long or overly complex. Taking the time to make an agreement and using it well can help to keep your brand secure.
Get started now by using our employee confidentiality agreement template. Create, download, and print your employee confidentiality agreement in just minutes online.