Employee Confidentiality Agreement

An Employee Confidentiality Agreement is signed by both the employer and the employee, where the latter is to promise not to disclose any sensitive information of the former for a period of time.

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There are many uses of an Employee Confidentiality Agreement, a standard business practice nowadays. It is advantageous if you have much data to protect or if you have to protect new developments in your business.

The goal of an Employee Confidentiality Agreement is to protect that information from reaching your company's competitors. Having your employees sign this agreement likely gives you peace of mind to carry on with your business with one less concern.

What Is an Employee Confidentiality Agreement?

The most vital aspect of an Employee Confidentiality Agreement is to make it specific enough to be easily enforceable. A potential problem, in general, is if the scope of what's being protected is too broad. A court of law can strike out that and any unreasonable promises extracted.

Also, the term of the agreement must be set. It should specify if the employee is not to disclose certain information for some time or in perpetuity. You should also determine if it is necessary to abide by the agreement if the employee leaves the company and how long after that.

Other Names for Employee Confidentiality Agreement

Depending on your state, an Employee Confidentiality Agreement may also be known as:

  • Employee Non-Disclosure Agreement
  • Employee Confidentiality Contract
  • Employee Secrecy Agreement
  • Proprietary Information Agreement

Who Needs an Employee Confidentiality Agreement?

Any employer may decide to ask future or current employees to sign an Employee Confidentiality Agreement. It is standard practice in specific industries, for example, technology. A potential employee may decide against signing the agreement, for which the employer would have the right to withdraw the employment offer.

Why Use 360 Legal Forms for Your Employee Confidentiality Agreement

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Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your Employee Confidentiality Agreement.

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All you have to do is fill out a simple questionnaire, print, and sign. No printer? No worries. You and other parties can even sign online.

How to Create an Employee Confidentiality Agreement with 360 Legal Forms

If you are a business owner who is always hiring, it may be smart to ask your employees to sign an Employee Confidentiality Agreement. Instead of hiring a law firm or risking a mistake on your own, you can use a template to create your agreement.

Let 360 Legal Forms help with our extensive library of attorney-vetted legal forms. The process is fast and easy. All you have to do is fill out our easy-to-understand questionnaire. Once complete, simply download your form as a PDF or Word document from your secure online account.

What Information Will I Need to Create My Employee Confidentiality Agreement?

To create your document, please provide:

  • Employer Information: The legal name of the employer.
  • Employee Information: The legal name and contact information of the employee.
  • Governing State: The state where the agreement is to be signed.
  • Effective Date: The date when the deal is to be signed.
  • Consideration: Disclose if there are any incentives given to the employee for entering into this agreement.
  • Examples: A specific example of what would constitute confidential information.
  • Term: Specify the duration of the contract.

Employee Confidentiality Agreement Terms

  • Cease and Desist: A demand to stop using copyrighted materials, usually issued by the rights owner or the legal representative
  • Injunction: A court order for one party to refrain from a specific act or risk a charge of contempt of court
  • Disclosure: Giving information to another party
  • Severability: The quality of a document, such as an agreement or a lawmakers' bill, being valid even when some parts or provisions are struck out (valid without the offending parts or provisions)
  • Non-solicitation clause: A clause forbidding one party from soliciting or poaching employees and clients
  • Employee Handbook: A document or manual containing a company's job-related policies

Employee Confidentiality Agreement Signing Requirements

For an Employee Confidentiality Agreement to go into effect, both parties need to agree to the terms and sign the document. Notarization isn't necessary, but having a witness could be beneficial if there's ever a dispute in the future.

What to Do with Your Employee Confidentiality Agreement

Both parties are entitled to have a physical copy of the signed Employee Confidentiality Agreement. The employer should keep the document with the rest of the employee records. As for the employee, they may want to keep the copy in a safe and secure location.

Frequently Asked Questions

The consequences of not having an Employee Confidentiality Agreement may vary significantly. In most cases, the type of industry and the business model of the company may affect what will happen. Having trust in your employees might be sufficient when running a smaller business. But not having an Employee Confidentiality Agreement is likely to open your business to numerous vulnerabilities.

The reason why it is so important to specify the location of the signed agreement is that the relevant business laws may vary from state to state. It is preferable to be familiar with your state’s law regarding confidentiality agreements in general and how they are enforced before signing the agreement.

The specificities of what happens if an employee breaks the agreement are usually included in the agreement. An employer can be as detailed as desired as to what is to be expected as a consequence if the terms are broken. It could start with monetary penalties and termination and up, including litigation and a claim for the suffered damages.

To be on the safe side, some employers choose to hire a law firm to help them draft an Employee Confidentiality Agreement. Some of the wording for these contracts may be confusing to the uninitiated. Also, since you have to adjust the document according to the state law, you might need an expert's help to guide you through it.

If you don't want to spend resources on attorneys, you can create the Employee Confidentiality Agreement on your own. It is essential to avoid common mistakes like making the agreement too broad and potentially unenforceable. Make sure that all the legal names of the parties are correct before signing. Also, it is crucial to make sure the person signing the document has the authority as the company's representative. Otherwise, it might end up legally unenforceable.

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Applicable to all 50 states
Applicable to all 50 states

Our documents are vetted by lawyers and are applicable to all 50 states.