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Do you need a confidentially agreement?

For most businesses, it is essential for the employees and employer to have a relationship of trust. Employees should recognize that when the business does well, they will do well and they all have an interest in the success of the business.

Employees owe their employers a duty of loyalty, but this is a somewhat abstract legal duty that few employees may understand. They also are prohibited from disclosing trade secrets under the Minnesota law, but again, few may be familiar with that law. So, if you have information that is confidential and proprietary for your business, the most direct way to protect it may be through a confidentiality agreement.

The advantage of a confidentiality agreement for employers is that they permit the identification of specific information that needs to be protected. This allows the employer inform or remind employees of the types of information that is not to be disclosed to those outside the business or even others within the business.

As with any legal document, specificity and precision are a virtue. The more narrowly the company defines the protected information, the more likely a court will side with the entity, should an employee attempt to use that information.

Like non-compete clauses, these documents can be seen as a restraint on trade, and a court may be skeptical of a confidentially agreement that seems too broad and would prohibit a former employee from using anything they had learned while employed.

Should litigation develop, a detailed list of covered material within the agreement can help enforce your claims and prevent employee's from claiming they did not understand the scope of the agreement.

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