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What is a confidentiality agreement?

If you're running a business, one of the things you may ask new employees to sign is a confidentiality agreement. With this agreement, you're asking that the employees do not talk about the work you do. If someone breaches this agreement, then you have a right to legal action against him or her in most cases.

A confidentiality agreement is a legal contract. It is binding and has terms and conditions that restrict what an employee can say about his or her job. The employee, for example, may not be able to discuss the work platform used to reach out to clients or could be restricted from talking about his or her clients outside the workplace.

A confidentiality agreement is binding for the entire length of a person's employment and for some time after the person leaves the job. Usually, the agreement only extends a few years before ending. At that point, the individual is free to speak about what occurred in the workplace, his or her contacts and other facts or figures.

Those who work in upper management are most likely to have to sign a confidentiality agreement. For instance, if a chief executive officer (CEO) has an upper level manager taking notes on company revenue and figures, he would want to have a confidentiality agreement with that employee.

Others who might use confidentiality agreements include those who receive contracted work. They may have to sign an agreement before taking the work and agree not to speak about the project to anyone except project managers or others in charge.

If you hire someone and he or she breaches your agreement, your attorney can help. With evidence, it's possible to seek a claim against anyone who leaks your company's information.

Source: The Balance, "Confidentiality Agreement," accessed May 11, 2017

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