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Properly executed confidentiality clauses protect businesses

On behalf of Kadish & Associates Law Group posted in Business Litigation on Friday, September 13, 2019.

Business owners have to do what they can to protect the company’s interests. One option that they have is to require employees to sign confidentiality agreements. These have specific terms that the worker must abide by. When they don’t, they can face penalties and consequences.

A confidentiality agreement that protects the business must include specific information. It must outline precisely what trade secrets must remain private. This can be anything from client contact information to recipes and formulas for doing business. Anything vital for the company to continue doing business should be present in the agreement.

Companies should also include anything that would provide a competitor with an advantage. This might mean that you have to include the ways that workers can address complaints if you require your workers to go well above what is standard in the industry or have a specific formula for handling problems.

The amount of time the agreement is another point to include. Typically, these agreements span the length of employment and continue for one to three years after the termination of the employment term. Once that time limit has passed, the person isn’t bound by the terms of the agreement.

It must include specific information about what happens if the person violates it. This can involve a host of options, including arbitration and legal action. It might provide for particular damages.

One point to remember is that you can’t have a confidentiality clause that is so broad that your employees are unable to find a job in their chosen field if they leave your company. Because confidentiality clauses are sometimes used in conjunction with non-compete clauses, you must find out how the law might view your specific agreement if there is ever legal action related to it.

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